Farmland is one of the most significant assets producers have in their portfolio. Strong land values are critical to maintaining strong equity positions for producers and good collateral for ag lenders in the current economic downturn.
An Iowa State University survey results are unclear on where land values are going as signals are mixed. For example, the Iowa State Land Value Survey shows the Iowa farmland market has dropped three years in a row after peaking in 2013. It’s the first three-year drop in Iowa since the 1980s. At the same time, several sources are predicting that the drop in Iowa farmland value has begun to slow.
The Federal Reserve Bank of Chicago recently reported a two and five percent increase in farmland value for Iowa and Wisconsin, respectively, from April of 2016 to this past April. That’s the first year-over-year increase for Iowa in four years. USDA’s recent Land Value Survey in August of last year showed a modest climb in land values in the Southeast, the Delta region, and the Southern Plains, from June of 2015 to June 2016.