AMES (AP) — An Iowa State University survey says farmland values in the state rose 2.3% over the past year, despite the trade disputes and declining income.
The increase was only the second in six years, according to the survey report released Wednesday.
Low interest rates, strong yields and a limited amount of available land helped boost the statewide average to $7,432 an acre (0.40 hectares), said Wendong Zhang, an Iowa State assistant economics professor. But the figure is about 15% below the 2013 high of $8,716 an acre. Iowa farm income has dropped around 33% since 2013, to $5.6 billion last year.
“We are still faced with significant uncertainty, especially the ongoing U.S.-China trade war, which has significantly affected U.S. agricultural exports, especially soybean exports, and led to lower commodity prices and weaker farm income,” Zhang said.
A continued rise in farmland values hinges on the speed of Federal Reserve moves on interest rates, progress in the trade talks and the availability of land, he said. The Federal Reserve has dropped interest rates three times over the past year.
Eighty-two of Iowa’s 99 counties reported higher land values, with the remaining 17 seeing a decline, the survey showed.