Mike Duffy, ISU Economics professor and study director, says it is the third straight year land values have increased 15 percent or more.
Land values in northwest Iowa led the gains. O’Brien County had the highest average county value at $12,862 per acre, up a whopping 35.2 percent from last year. Farmland in Clay County averaged $10,688 per acre.
Duffy said there were a number of factors that contributed to the gains.
Duffy pointed out that farmers are still the principle buyers of Iowa farmland, representing 78 percent of the buyers. And he said that – while spectacular prices at auctions draw a lot of attention, the majority of land sales are by private treaty.
Duffy expects the farmland market to cool down considerably, and he presented three scenarios: (1) a bubble-burst; (2) a slow tire leak; or (3) slower growth in land values, perhaps in the two to three percent range.