Midwest Farmland Prices soared during 2007, according to the Des Moines Register today. According to the appraisers at Farm Credit Services of America, farmland prices increased 20% or more in three of the four states covered by the organization (Iowa, South Dakota, and Wyoming) during 2007, with the fourth (Nebraska) close behind at 19.6%. Kirk Manker, chief appraiser, credits profitable commodity prices, increasing yields, relatively low interest rates, and ethanol production for the increase in Midwest farmland prices. A secondary factor cited by Mr. Manker is the decreased value of the dollar compared to other currencies, which has the effect of boosting exports of our agricultural products since they therefore are less expensive compared to previous years. The final reason given for the increase in farmland values is investors and recreational buyers purchasing land.

Here are the stats:

• Iowa    22.6% increase
• South Dakota  22.6% increase
• Wyoming        20.9% increase
• Nebraska         19.6% incrase

Will it continue? Michael Duffy, Iowa State University Extension economist, thinks so. His thoughts: “We have seen a fundamental shift in demand for corn due to ethanol production. I don’t think this demand will diminish in the near future.” Mr. Duffy says he thinks Iowa farmland values will continue to be strong into the next five years at least.

Ken Tharp

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