I would describe the current land market as stable with some local volatility. The following data suggests as much.
It is hard to distill true market trends with only 200 auctions over a quarter, however if we believe in the numbers, they revealed several interesting trends:
- The average price for both all farms ($7,430/acre) and 85% tillable farms ($8,416/acre) are still higher than that a year ago.
Land auctions exceeded 200 sales in the last quarter of 2017 compared to merely 120 in quarter 3, with especially more land that is not necessarily higher-quality tillable farmland. This bump in farmland supply has resulted in a minor dip in the land prices over the past few months especially for lower quality land, however, the prices for higher quality tillable grounds are fairly stable and represent a modest increase over average sale price of $8,625 in 2016 quarter 4.
Land Auctions picked up the last month of quarter 3 with a good amount of land coming up for auction. September tested with market with more land being auctioned than any month in 2017. The quarter 3 data indicates a very stable market. The data suggests that quarter 3 is down slightly from quarter 2 by -0.4% on 85% tillable farms. The data suggests the market has gotten stronger throughout the year and even with more land being auctioned, the market appears to be very strong.
I have one word to describe the current land market in Iowa - STRONG. This contradicts everything you hear from the news media. No, the news media is not reporting “fake news”. The news media is reporting: lower commodity prices, lower farm net income & lower cash rents than in 2016. All true. What is not being reported is the ultra-low supply of farmland for sale and the amount of pent up demand to buy farmland by farmers and investors. Demand to buy farmland is still very strong in 2017.