Iowa Farmland Values Decline for First Time in Five Years

Farmland values in Iowa declined for the first time in five years, according to the latest Benchmark Farm Value Trends Report issued by Farm Credit Services of America (FCSAmerica) and Frontier Farm Credit. Iowa farmland values show an average decline of 2.4% for both the past six and 12 months, according to the report. "The combination of higher interest rates and tighter margins for grain producers is having an impact on cropland values," says Tim Koch, FCSAmerica executive vice president of business development. Several years of strong profitability created optimism in the real estate market and helped to offset the impact of the Federal Reserve's rate hikes in late 2022 into 2023, Koch says. The market continues to benefit from willing buyers competing for limited land. But as grain prices have fallen, attention is shifting to a more challenging economic environment, he says. However, farmland values continue to hold their own when averaged over five states, according to the report. Benchmark farmland values ticked up an average of 0.07% across Iowa, Kansas, Nebraska, South Dakota and Wyoming, the five states served by FCSAmerica and Frontier Farm Credit. It's important to note, however, that Iowa is generally on the leading edge of market trends. Despite the pullback in Iowa, real estate values are up almost 60% since 2019. Since January, land values made modest gains in eastern Kansas, Nebraska, South Dakota and Wyoming. Across all five states, values remain at or near record levels, according to company officials. Knowledge is power! Stay empowered by subscribing to the free newsletter, packed with valuable insights, stories of local newsmakers and ideas to get your weekend started.