A 1997 Iowa State University study showed that over a third, 37 percent, of the farm land in Iowa was owned by people over the age of 65. Another study in 2000 revealed that only 29 percent of Iowa's farmers had identified a successor for their farm. This study further showed that only 45 percent of the farmers had an estate plan.
These studies show that over the next several years a significant portion of Iowa's farm land will change 
ownership. Further, the studies also reveal that few people have planned what will happen to their farm upon their death. This means there will be a number of people who will be facing the decision whether or not to sell the land and whether or not to buy land.
The price of land is determined in the market, whereas the value of the land is an individual determination. Today land prices for some "good ground" is breaking the $5000 and now $6,000 per acre mark with a statewide average of $3204 per acre. That tops the 2005-2006 average per acre of $2914 per acre statewide.
What is it that is causing the increased prices in farm land? Ethanol and corn prices. With so many new ethanol plants in Iowa there is a demand for corn to produce the ethanol. With the increased demand for corn, there is going to obviously be an increase in the value of the land used to grow that corn. Will the ethanol revolution last and can land prices hold? Thats yet to be seen and there is no certain answer to the question.
If you want to buy or sell Iowa farmland you are probably curious as to how values are determined on land. With some land selling for $1700's per acre and some selling over $5000's per acre there must be some difference in land right? There is a difference. Land is no land. Land has different qualities that affect its value.
While the value of land is an individual determination, that individual determination is often based on certain factors that influence the value. Probably the largest influence in most situations is going to be the soil types or soil inventory on the farm land. Obtaining a soil inventory report will be the most helpful information in determining value of farm land you are selling or buying. A soil inventory report will include a detailedsoil inventory as to what different soils are on the farm and how they can be used. The soil inventory should include the physical resources such as topography, drainage, degree of erosion, slope and climate. All of these sub factors will have an influence on value. As you can imagine that land with steeper topography is going to be less valuable than flat farmland, however the flat farmland may have poor drainage issues that sloped land does not.
Ortho photography and other satellite photography can help you see the land in a new way you can't see from the gravel road. It will help you to see how neighbors are using their land, drainage and erosion issues, access issues among other things.
Why would soil types matter? After all dirt is dirt right? No dirt is not dirt. Each farm inventory of soils will be different. The properties of certain soils are more suitable for row cropping than others. In Iowa we have a rating system called the Corn Suitability Rating is a scale that is used to refer to the overall quality of land, and its suitability for extended row cropping. Corn Suitability Ratings or the CSR is expressed in a number from 0-100. A CSR parcel map will look something like this.
Even if you do not plan to farm the land these factors are still important to consider. For those that purchase recreational land for wildlife management or deer hunting in Iowa soil types for food plots will be important.
If you are selling land what is the best way to sell it? Should you list it with a Realtor or hire an auctioneer? Each situation is different and all factors would have to be weighed. Give me a call for more information.
By comparing all of the above factors to other land that has sold recently you will be able to develop an idea of what the land you are buying or selling is worth. If you are wondering and need some help finding land or determining value of land give me a call. I have the resources to find the information you need.
FOR MORE INFORMATION ON BUYING AND SELLING FARM OR RECREATIONAL LAND IN IOWA CONTACT ME
Loess Hills Acreages and Farms | Southwest Iowa Homes | NP Dodge Real Estate
Jason Smith, REALTOR® Sales Associate - NP Dodge Real Estate
Homes, Acreages, Farms, Land, Building Lots and Auctions
Cell Phone 402.250.1006 Email Jason@gowithjason.com
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I do not, as a common practice, sell farm land. However, I do know of a property in Ft. Lupton, Colorado that is for sale and am trying to help a friend sell it. This is 150 acres of river-front property that will never be posted on any MLS or have a yard sign, etc. Only word-of-mouth type marketing with this piece of property.
It is currently zone for agricultural use, but the buyer can have that changed to meet his needs. The Buyer could be a residential developer, golf course developer, commercial developer, etc. There is an older home on the property that can be scrapped and a new estate built in it's place if the buyer chooses to use this for his own residential needs.
Please let me know if you know anyone looking for an opportunity such as this. I would be happy to work with them.
Good information! Here in the Ozarks, I get buyers from all over the country who call looking for cattle land. They hear $1700-$2500 per acre and get excited because it's so much higher where they are. but what they don't hear is that some of the land is just not suitable for cattle. There are steep hills, bluffs, soil with too much clay, too many rocks, etc, on many of these parcels. Land is land, but not all land can reasonably be used for all purposes. many want timber land and buy it sight- unseen. Big mistake! Just because a piece of land is listed as "all wooded" does not mean that the trees there are large enough to be logged.
I wish more buyers would do a little research before they buy. I wish ALL agents would learn the difference between "wooded" and "marketable timber," and "pasture" versus rocky soil growing noxious weeds. many seem to think if it's not heavily wooded, then it is pasture...
You are right Amber that each land has it uses. I've never sold any sight unseen but could sell timbered ground all day if I had them listed. With so many sources for information there really is no excuse for not researching any land purchase.