Farmland prices in Iowa hit a new record high on Thursday when an 80.47-acre parcel sold for $21,900/acre, the auction firm that handled the sale said Friday. The parcel is located in Sioux County near Boyden, Iowa, about 42 miles southeast of Sioux Falls, S.D. The sale soared past last year's record price of $20,000/acre which was set in an auction for a 74-acre parcel held in the same county in northwest Iowa.
Thursday's buyers were neighboring farmers, a spokesman for Vander Werff and Associates Inc., which ran the auction, told Reuters News Service.
The sky-high prices underscore how demand for Iowa farmland has remained strong, given that commodity crop yields fared far better in the Hawkeye State than in many other parts of the Corn Belt this summer.
Given that crop prices hit historical highs this summer, these somewhat larger yields gave some Iowa farmers an economic boost and added to the record income levels they enjoyed in 2011, Michael D. Duffy, professor of economics at Iowa State University told Reuters.
Whether Iowa's land values will continue to rise, though, will depend on the weather, he said. "If you look at what the prognosticators are saying that I look at, the predictions for corn prices range from $4 to $9," Duffy said. "If we get moisture this winter and spring, the prices will fall back for land. If we don't, they’ll stay up."
Iowa farmland prices have risen steadily in recent years. The value of tillable land jumped an average of 7.7% in the state over the past six months, according to a recent farmland survey released by the Iowa Farm & Land Chapter No. 2 Realtors Land Institute.
The value of Iowa cropland for potential corn production increased nearly 21.9% over the 12 months ended in September, according to the survey.
Thursday's sale was far from an anomaly. Earlier this week, a different piece of farm property in Sioux County sold for $19,100/acre.
Editor’s note: Richard Brock, Corn & Soybean Digest's marketing editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.