Missouri river bottom south of Sioux City, IA | Looking at passed data, lower crop prices over longer time periods can have an effect on land prices. From August 2014 through November of 2020, a little over 6 years we only saw one month in that time period where the monthly average cash corn price in Iowa was over $4.00. At that time it did affect land prices. Iowa’s average land price in 2014 was $7,943 and in 2020 it was $7,559.
Here is more info to consider. Iowa’s average land prices went from $7,559 in 2020 to $11,835 in 2023. That is $4,276 in just 3 years or $1,425 per year. The last large land price run up went from $2,275 in 2003 to $8,716 in 2013. That is $6,441 in 10 years or $644 per year.
My thought is you probably need to plug in some lower or possibly negative returns in the coming years. Sub $4 cash corn will not cut it when making payments on $15,000 an acre ground. There is one thing you can count on happing if you’re a farmer. It’s the boom & bust cycle of the farm economy. Playing your cards right in the boom cycle makes the bust much easier to handle.
Tom N.
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Land values into the future
