DES MOINES — The damaging drought apparently hasn’t dried up demand for farmland in Iowa, where prices continue to soar.
A survey released Thursday by the Iowa Farm and Land Chapter of the Realtors Land Institute said farmland prices have increased an average of 7.7 percent since March and 18.5 percent in the past 12 months to nearly $7,900 an acre. The institute surveyed 300 of its members for the twice-yearly report.
Kyle Hansen, who led the institute’s survey committee, said much of the increase in demand has come since July, when the severe drought became apparent in Iowa and much of the Midwest.
Realtors said high corn and soybean prices, relatively low interest rates and the lack of land for sale helped lift prices.
Lee Vermeer, vice president of real estate operations for Farmers National Co., told The Gazette in Cedar Rapids that this summer’s drought had little impact on farmland sale prices.
“I realize that we do have a drought, and in some areas it’s very severe, but for those farmers who have insurance the coverage is very good,” Vermeer said. “If they have strong levels of insurance in place, they’re going to hold their money together for the most part this year, and they’re looking at very strong commodity prices again for next year.”
Others note that despite drought concerns, corn and soybean yields haven’t been as bad as many expected.
Randy Hertz, of Hertz Farm Management of Nevada, told The Des Moines Register that, in some ways, wet weather in previous years caused nearly as many problems as this summer’s dry weather.
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“Before this year, the problem was too much moisture, and that causes loss of nitrogen and soil compaction problems,” Hertz said. “We haven’t had those problems this year. The ground has held its nitrogen much better, and whatever rain fell soaked in immediately.”
Prices rose in all nine regions of the state in the six-month period, with western Iowa showing the biggest increases. Prices were up 10.8 percent in the southwest and 10.3 percent in the northwest.
The west central district had the highest average price of $11,475 per acre.