Survey shows farmland values increase slightly

GRUNDY COUNTY – This month, Iowa State University released the results of their annual Farmland Value Survey for 2017, which shows a slight increase in values in Grundy County and across the state after three consecutive years of declines.
In 2017, farmland values rose an average of two percent across the state, with prices rising from $7,183 per acre to $7,326 per acre – a $143 increase. Here in Grundy County, prices increased slightly more than the state average, about three percent, from from $8,552 to $8,816 per acre.
The report states that positive factors influencing the land market include low interest rates, limited land supply, strong yields, strong demand and investor demand, while the most commonly noted negative factor influencing the market was lower commodity prices. 
But Dr. Wendong Zhang, an Associate Professor in Economics at Iowa State University and author of this year’s ISU farmland values survey, says that even with the slight increase in values, it will likely continue to be an uncertain road for farmers and landowners.
“This represents the first, albeit modest, increase in the Iowa farmland market after three consecutive years of decline from 2013 to 2016; however, this does not necessarily indicate a turn of the land market,” Zhang writes in his report. “Actually, the inflation-adjusted average farmland value saw a 0.2 percent drop since a year ago. Given rising interest rates and stagnant farm income, the continued decline in values in the foreseeable future is still likely. This could be just a temporary break in a downward adjustment trajectory.”
For the full story, see this week's Grundy Register.