Recent economic reports in Iowa show a constant growth in the value of Iowa farmland. For the past ten years, farmland values in the Hawkeye State have steadily risen, increasing 24 percent this year alone. From a ten year low in 2000 of $1,857, land values have shot up to a dizzying $5,064.
This increasing land value is not merely an Iowa phenomenon, but part of a larger pattern. Over the last several months, farm value across the Midwest has risen by 20%.
Reactions to the increased land value have been mixed. While estate lawyers and rural investors are ecstatic, some farmers are worried about possible downturns. This pattern of steady growth is not only a recent phenomenon, but reminds many older farmers of the 1970s and the agricultural collapse of the 1980s.
From 1971 to 1981 farm values quadrupled, leading to a golden age of American farming. Increased agricultural technology, chemical and fertilizer advancements, increased foreign markets, and high crop prices all helped to increase land value and expand the industry.
However, when crop prices dropped and markets collapsed in the 80s, the high interest loans taken out on valuable farmland ruined farmers across the country, leading to one of the darkest periods in agricultural history since the Great Depression. In Iowa alone, over 10,000 farms went out of business during the course of the farm crisis.
Most farmers across the country are predicting a drop in land values and crop values in the next few years. However, while a decline in land values will certainly hurt, the protections built into the farm industry will most likely prevent a total collapse reminiscent of the 1980s.
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Written by: Justin Ellison / Farm Plus Staff Writer