By Andi Anderson
Iowa State University's 2023 land value survey revealed a stabilization in land prices after a period of rapid growth. Dr. Chad Hart, an Economics Professor at the university, highlighted the trends in land values, noting substantial expansion in recent years.
The data showed a significant surge in land values in 2021, with a nearly 30 percent increase, followed by a 17 percent rise in 2022. However, the pace of growth slowed considerably in 2023, with a modest three percent increase.
Looking forward to 2024, Dr. Hart expects a correction in land values. This projection is attributed to higher interest rates imposed by the Federal Reserve in the past year, coupled with a decline in commodity prices during the same period.
One positive aspect noted by Hart is the significant portion of Iowa farmland that remains free of debt. Nonetheless, he expressed concern about the national trend of increasing farm debt, despite the stability observed in the region.
Farmers have been adjusting their financial strategies by reducing short-term debts and decreasing the demand for operating loans. However, there has been a rise in longer-term debt, particularly in real estate mortgages.
For 2024, Dr. Hart anticipates a return to a more standard state for the farm economy, albeit with a gentle decline—a "soft landing" that signifies a less stressful economic environment overall.
As the agricultural landscape in Iowa and beyond continues to change, these insights from the Iowa State economist provide valuable foresight into potential shifts and challenges in the farming economy.
Photo Credit: Iowa State University
Categories: Iowa, Business