What is Happening with Iowa’s Land Values: Results from ISU’s Latest Survey Dr. Wendong Zhang Assistant Professor of Economics and Extension Economist Ag Bankers Conference, March 22, 2016
A Quick Introduction: Dr. Wendong Zhang Dr. Mike Duffy can never be replaced – Grown up in a rural county in NE China – Attended college in Shanghai and Hong Kong – Ph.D. in Ag Econ in 2015 from Ohio State – 2012 summer intern at USDA-ERS on farm economy and farmland values – Research and extension interests: land value, land ownership, agriculture and the environment, China Ag
Why Care About Farmland Market?
3,500.0
Distribution of U.S. Farm Assets
3,000.0
Billion $
2,500.0 2,000.0 1,500.0 1,000.0 500.0 0.0
2011
2012
2013
2014
2015F
Real estate
Livestock and poultry
Machinery and motor vehicles
Crops stored
Purchased inputs
Financial assets
Source: USDA ERS
Current Situation of Iowa Farmland Market
STATEWIDE AVERAGE $7,633
down down
-3.9% -$310
AVERAGE VALUES all farmland 1950−2015 Nominal vs. Inflation Adjusted Iowa Farmland Values 10000 9000
Nominal
7000
Real
6000 5000 4000 3000 2000 1000
Year
2013
2010
2007
2004
2001
1998
1995
1992
1989
1986
1983
1980
1977
1974
1971
1968
1965
1962
1959
1956
1953
0 1950
Land values ($/acre)
8000
% Change in Iowa Farmland Values 1951-2015 40.0% 30.0% 20.0% 10.0% 0.0% -10.0% -20.0% -30.0% -40.0%
US Farm Income 19902025
Source: USDA OCE
Iowa Corn Prices vs. Costs
Source: Chad Hart, Mike Duffy
Iowa Soybean Prices vs. Costs
Source: Chad Hart, Mike Duffy
Iowa Land Values by District and County
Not Every Iowa District Are Created Equal
Land Values by District and Land Quality, 2015 District
Average Value
% Change
High Quality
% Change
Medium Quality
% Change
Low Quality
% Change
Northwest
$9,685
0.7%
$11,229
0.3%
$8,834
1.6%
$6,252
2.6%
North Central
$7,962
-6.7%
$8,976
-6.8%
$7,352
-6.6%
$5,372
-1.0%
Northeast
$7,861
-3.6%
$9,575
-5.0%
$7,460
-1.7%
$5,242
-0.3%
West Central
$8,061
-4.3%
$9,684
-5.8%
$7,581
-3.2%
$5,082
-1.8%
Central
$8,505
-6.4%
$10,087
-6.4%
$7,758
-6.8%
$5,292
-5.2%
East Central
$8,506
-5.6%
$10,289
-6.8%
$7,934
-5.4%
$5,366
-2.1%
Southwest
$6,372
-2.2%
$8,031
-5.3%
$6,038
-1.2%
$4,070
5.4%
South Central
$4,397
-1.7%
$6,445
-3.3%
$4,282
-0.8%
$2,750
-2.1%
Southeast
$6,892
-4.5%
$9,536
-6.0%
$6,525
-2.8%
$3,797
-2.4%
State Avg.
$7,633
-3.9%
$9,364
-5.0%
$7,127
-3.2%
$4,834
-0.9%
Livestock and Crop Inventory by District Inventory 2012
Harvested Acres 2015
Chickens, Layers
Hogs
Milk Cows
Cattle
Corn
Soybean
Northwest
30%
26%
29%
22%
15%
16%
North Central
64%
16%
4%
6%
14%
13%
Northeast
1%
12%
51%
16%
12%
8%
West Central
0%
13%
1%
13%
15%
16%
Central
3%
13%
1%
7%
15%
14%
East Central
1%
5%
10%
11%
10%
10%
Southwest
0%
2%
0%
9%
7%
9%
South Central
0%
2%
1%
9%
4%
5%
Southeast
1%
11%
3%
6%
7%
8%
State Inventory
20.4 million
20.4 million
0.17 million
2.34 million
13.2 million
9.8 million
Crop and Livestock Prices
Source: Chicago Fed
Iowa Farmland Sale Activity since November 2014
More
Northwest North Central Northeast West Central Central East Central Southwest South Central Southeast STATE
Less Percent
Same
13 9 11 4 12 5 11 6 18
44 64 57 71 70 60 62 76 47
43 27 33 25 18 35 27 18 35
10
60
30
Iowa Land Values by County 2015
Iowa Land Value % Change by County 2014 2015
Iowa Farmland Purchases by Buyer Types 1986-2015 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%
Existing Farmers
Investors
New Farmers
Other
Iowa Method of Sale Method
2010
2011
2012
2013
2014
2015
Public Auction
37%
47%
50%
47%
53%
48%
Realtor
28%
21%
18%
18%
18%
23%
Private
28%
21%
24%
30%
24%
23%
Sealed Bid
7%
10%
8%
5%
5%
6%
Other
1%