How Much Is an Acre of Farmland in Iowa?

Iowa stands as a significant agricultural producer, with its fertile lands forming the bedrock of its economy. Understanding the value of an acre of farmland in this region is fundamental for farmers, investors, and landowners alike. Farmland is a substantial asset whose valuation reflects agricultural output and broader economic conditions, guiding strategic financial decisions within the agricultural sector.

Current Farmland Values in Iowa

The average value of an acre of farmland in Iowa was estimated at $11,467 as of November 1, 2024. This figure represents a 3.1% decrease ($369 per acre) from the previous year’s valuation. The annual Iowa State University Land Value Survey provides this statewide average, encompassing all land qualities like cropland, pasture, and timberland.

While this is a statewide average, actual prices vary considerably based on land quality. In 2024, high-quality land averaged $13,930 per acre, medium-quality $10,740, and low-quality $7,450. All quality categories also saw a decrease from the prior year. Regional differences exist, with some areas seeing slight increases and others notable declines.

Factors Influencing Farmland Value

Several factors influence farmland value. Commodity prices for major crops like corn and soybeans directly affect farm income, impacting buyer willingness to invest. When commodity prices are lower, profit margins for agricultural operations can tighten, potentially reducing land values. Conversely, strong yields and higher commodity prices can boost farm revenue and support land prices.

Interest rates play a substantial role; higher rates increase borrowing costs for land purchases and reduce agricultural investment profitability. Persistently high interest rates have contributed to downward pressure on land values in recent years. The availability of cash and credit also enables farmers to remain active in the land market, influencing demand and pricing.

The supply of available farmland is another significant determinant of value. A limited supply of land for sale, especially high-quality parcels, tends to support or even increase prices due to competitive demand. Existing improvements like drainage systems (including tiling), irrigation, and functional farm buildings enhance productivity and overall value. Soil quality, often assessed by the Corn Suitability Rating (CSR2) in Iowa, is a fundamental characteristic dictating productive capacity and driving value.

Location significantly impacts farmland value; proximity to grain elevators, processing facilities, and established agricultural markets generally commands higher prices. Access to transportation networks like roads and rail also contributes to a property’s appeal and value. Weather conditions and their impact on crop yields introduce uncertainty, influencing market sentiment and price expectations.

Sources for Farmland Value Data

Reliable data on Iowa farmland values comes from several reputable sources. The Iowa State University Extension and Outreach annually conducts a Land Value Survey. This survey is based on expert opinions from agricultural professionals, including real estate brokers, farm managers, appraisers, and lenders across all 99 counties. Their “Ag Decision Maker” publication provides detailed reports, including statewide averages, district-level data, and breakdowns by land quality.

The United States Department of Agriculture (USDA) also publishes land value reports, including specific data for Iowa. The USDA’s National Agricultural Statistics Service (NASS) provides yearly estimates for cropland and pastureland values, offering a valuable perspective on market trends. These reports often include historical data, allowing for analysis of long-term value changes.

Agricultural real estate agencies and land appraisal services are additional sources of current, localized information. These professionals often track auction results and private sales, providing insights into specific property transactions. Engaging with a qualified land appraiser offers the most detailed and tailored valuation for an individual parcel, considering its unique characteristics and local market dynamics.

Understanding Farmland Value Trends

Iowa farmland values have adjusted after several years of substantial increases. The 3.1% decline observed in 2024 ended a five-year trend of rising prices. This recent decrease largely reflects pressures from lower commodity prices and persistently high interest rates, which have tightened profit margins for farmers.

Despite this modest decline, 2024 nominal land value remains higher than 2021 and 2022 values, when a significant surge began. Factors like limited land supply, strong crop yields in some areas, and continued demand from expanding farm operations and investors provide underlying support. While some experts expect further modest short-term declines, many survey respondents anticipate long-term increases over the next five years. This suggests a market rebalancing rather than a sustained downturn.