A new report shows Iowa farmland prices have declined four out of the last five years. Researchers from Iowa State University say lower commodity prices and higher interest rates have forced the declines. Based on the Farmland Value Survey, the 2018 Iowa land values have fallen 17 percent off the 2013 peak. However, despite these decreases, current Iowa farmland values are still almost three times more than the 2000 values, 66 percent higher than the 2009 values, and eight percent higher than the 2011 values.
The report compared farmland values and the S&P 500, to determine which provided a better investment. While the results varied, the report suggests that with the decline in farm income and a possible increase in interest rates, farmland values may continue to recede in the foreseeable future. Meanwhile, the S&P market is increasingly influenced by the global economy, especially emerging markets like China, trade and world security. Regarding which is a better investment, the report says, “timing is everything in the success of a rain dance.”