Cropland values still increasing in Iowa, Illinois

Growth slower than previous period, but demand remains high, Realtors Land Institute survey shows

Farmer harvest soybeans farmland values
A farmer harvests soybeans on a farm near Ely in November 2021. CREDIT RICHARD PRATT

Cropland values in Iowa increased 2.8% for the period from March to September 2022, according to the latest Land Trends and Value Survey conducted by the Iowa Farm and Land Chapter #2 of the Realtors Land Institute.

The report comes on the heels of a 14.1% increase in cropland values from September 2021 to March 2022, resulting in a 16.9% year-over-year increase for the state of Iowa.

The Illinois Society of Professional Farm Managers reported farmland values in Illinois have also increased in 2022, with a 18% jump over the previous year.

However, after double digit increases in the last two surveys, the market appears to be leveling off, according to a news release from Ruhl & Ruhl Realtors. Rising interest rates and higher input prices for the 2023 crop are making it increasingly difficult for the market to support higher land values.

In the East Central district of Iowa, high-quality cropland is selling at $16,182 per acre, the second highest rate in the state, up slightly from the value reported in March 2022.

Timber is selling at an average of $4,246 per acre.

“The survey just confirms my feelings that the rapid rise in land values are slowing,” said Eric Schlutz, ALC, Realtor, and manager of the Ruhl & Ruhl Realtors Muscatine office. “The rapid rise in interest rates and crop input costs are certainly a large factor in this.”

“The land values survey results of the past six months weren’t a total surprise, as the land market in general has leveled off and stabilized somewhat after nearly two years of very strong growth in values,” added Dennis Stolk, ALC, farm and land specialist with Ruhl Farm & Land. “I think it is in response to significantly higher production input costs for production agriculture, increases in interest rates and concerns about future economic conditions. However, demand for land is still very good in our local Eastern Iowa and Western Illinois land market, and we anticipate that it will remain that way in the near term.”

For the survey, participants were asked to estimate the average value of farmland as of September 1, 2022. These estimates are for bare, unimproved land with a sale price on a cash basis. Pasture and timberland values were also requested as supplemental information.