According to statewide auction results tracked by Iowa Appraisal, research data indicates farmland market conditions have plateaued.
Iowa Appraisal’s farm appraisal expert Jim Rothermich, MAI, ARA, ALC announces a 13.4 percent increase in Iowa land values, based on dollars per CSR2 point, for the period Jan. 1, 2022, to Jan. 1, 2023, with a statewide average price for tillable farmland of $178 per CSR2 point (based on a weighted average CSR2 of 77.2).
This equates to average statewide dollars per tillable acre of $13,742. The Jan. 1, 2022, statewide weighted average price for tillable farmland was $157 per tillable CSR2 point, using weighted average CSR2 of 79.3, equating to $12,450 per tillable acre.
The first six months of 2022 continued the prior year’s explosive increases, landing up 15.3 percent. Prices peaked in May then declined, leveling through the rest of the year. Historical amounts of land (almost 150,000 acres) were auctioned in 2022. Auction data suggests the market has “plateaued,” though land prices remain at historical highs.
Reasons for elevated market conditions include:
–Large buyer pool
–Inflation (land is perceived to be a hedge against inflation)
–Stock market volatility
–Historically low borrowing costs (early in the year)
–Generous farm income
–Plentiful harvest
About Iowa Appraisal – Iowa Appraisal provides agricultural and commercial real estate appraisals, appraisal reviews, market and feasibility studies, as well as research and consulting services throughout the Midwest: www.iowaappraisal.com. Business valuation, merger and acquisition consulting, and litigation support services are provided by BCC Advisers: www.bccadvisers.com.
