Farmland values in Iowa rose again but at a slower pace than the two previous years. The annual Iowa State University Land Value Survey found that farmland values increased 3.7 percent, or $424, to $11,835 per acre. That increase follows a larger 17 percent increase in 2022 and a near-record 29 percent in 2021.
The study showed several factors behind the surge last year contributed to the rising prices in 2023. The Federal Reserve has used interest rate hikes to help curb inflation rates, and future increases will continue to slow the growth in farmland values, but not immediately. The Iowa State study says it will take a couple of years for interest rates to be reflected in farmland values.
The impact of the aggressive rate hikes in 2022 is expected to be felt more strongly in 2024 and beyond. That will mean more modest growth or lower land prices ahead.