Average Iowa farmland value is now estimated to be $7,943 per acre, a drop in value of $773, or 8.9 percent, per acre.
Land values were determined by a survey conducted in November by the Center for Agricultural and Rural Development at Iowa State University.
Results are similar to results found by the Realtors Land Institute and the Federal Reserve Bank of Chicago.
While this year marks the largest decline in farmland values since 1986, it is only the second year since 1999 that the survey has shown a decline in farmland values. After hitting a historic peak in 2013, values have returned to a mid-point between 2011 and 2012 values.
In spite of the decrease, farmland values are more than double what they were 10 years ago, 81 percent higher than 2009 values and 18 percent higher than 2011 values.
For the second year in a row, Scott (eastern) and Decatur (south-central) counties reported the highest and lowest farmland values, respectively. Decatur County reported a value per acre of $3,587, a drop of $41 per acre from last year’s report.
While Scott County reported the highest value at $11,618 per acre, prices there declined about $795 per acre, or about $22 per acre more than the statewide average.
The largest decrease in farmland value was in southwest Iowa, which reported a drop of 13.5 percent. Worth County, located in the northeast portion of the state, however, reported the largest percentage drop in value for any one county at 15.2 percent.
The value of all grades of farmland fell, with high-grade farmland taking the largest hit and losing a full 9 percent ($974 per acre) of its value.
Medium and low-grade farmland fared slightly better, losing 8.5 percent ($688 per acre) and 7.9 percent ($420 per acre), of their values, respectively.
The only crop reporting district to show an increase in values was southeast Iowa, which reported values at 3.2 percent higher than last year. Keokuk County, located in the southeastern portion of the state, reported the largest percentage increase for any single county at 2.4 percent.
Corn and soybean prices started falling in 2013, and as a result farm income dropped. The most recent U.S. Department of Agriculure (USDA) net farm income estimate showed a record high income in 2013, but a 23 percent drop in net farm income for 2014.
Falling commodity prices, along with a drop in farmland value, could make problems for some farmers.
Of respondents that listed positive or negative factors influencing farmland values, low interest rates were the most commonly cited positive factor and lower commodity prices were the most frequently cited negative factor.
Other negative factors mentioned included high input prices and an uncertain agricultural future.
The survey is based on reports by licensed real estate brokers and selected individuals considered to be knowledgeable of land market conditions.