Iowa Farmland Sales For Cash – Why Are Prices So High?
November 15, 2023
The new record price for Iowa farmland for cash is a reminder that the state’s booming agricultural sector provides a economic cushion that has helped keep unemployment lower in many parts of the country. It is also boosting the state’s financial sector and contributing to the state treasury through income taxes and other tax revenues.
“The ag economy is so strong, and it’s a huge contributor to the state’s overall economy,” says ISU Extension economist Mike Duffy. He adds that Iowa farmers have been lucky in recent years, as their yields have exceeded expectations even during a harsh drought. He notes that this year’s corn prices are very high, partly because of international demand and the ethanol industry.
The high prices and increased demand are creating some interesting trends, he says. For example, the sale of the Garst family’s land in Carroll County earlier this month drew attention because it included an easement that requires new owners to continue conservation practices such as no-till farming and planting annual cover crops on the ground. It also required them to maintain the land’s headlands, terraces and waterways.
Besides being known for its grain production, Iowa land sales for cash is also home to a variety of wildlife. The state is a favorite place for turkey, whitetail deer, pheasant, geese and ducks. It’s also a prime spot for fishing, with catfish, bass, pike and walleye among the many popular fish species to be found in its lakes, rivers and streams.
With all these benefits, it’s no wonder that more and more people want to buy Iowa land for cash. But figuring out how much the land is worth can be difficult, especially when it’s sold at auction. The auction process is different than other real estate sales, and it’s often not transparent to potential buyers.
This is why some buyers opt for a broker to assist them. A broker can help them navigate the process, and they can also provide information on the area’s history and other factors that could affect the price.
The biggest chunk of the market for Iowa land is in the hands of baby boomers, who are now starting to retire and sell their farmland. According to a recent report, about 84% of Iowa farmland is owned debt-free, which is up from 62% in 1982. The survey was conducted by Wendong Zhang, an ISU professor who left the university for a position at Cornell last July.
In Iowa, public auctions account for 40-50 percent of all farmland sales. The rest are private-party sales or sales facilitated by a realtor. For more information on the auction process, check out an Ag Decision Maker article by Dr. Zhang. He has also written an Iowa Choices blog on the topic.