The Price of Farmland
Agriculture is vital to the economy of the region, and farmland prices reflect that.
Back in 2001, a high quality acre of land would go for almost three grand. Last year, it was over twelve grand.
The Federal Reserve interest rates are at historic low rates and commodity prices up, it is very easy to pay off the land and make a profit.
A farmland's worth is not determined by what grows on it, but how versatile it is and how the quality of soil is. A good parcel of land is flat with no obstructions with good soil and efficient tiling with many things helping to keep our prices up.
Drought in other locations and demand help our prices out.
"The drought, or less crop in other areas that have kept our prices up. World demand has picked up, we have ethanol world demand, a lot of different things that are keeping our prices higher than they have historically been and so I think you're going to see our land prices and our commodity prices stay higher than they have been in the past," says Chuck Wingert, Owner of Wingert Realty and Land Services Inc.
But land price increases may slow down this year and correct themselves with some buyer caution due to conditions in our area.
Bill LeDuc, Broker and Appraiser with Agri-Realty, says, "In this area we've been involved with a drought in recent years, so there's a question of the soil moisture, combined that with where we're at almost the first of May now and really don't have much done in the field, so there's a lot of nerves with that."
A dip in prices won't send the business into freefall however.
Prices in Iowa are a little more per acre than in Minnesota. Minnesota has a two–tier tax system and a shorter growing season than Iowa.