O'Brien County farmland is top dollar in Iowa

Though down from the previous year, farmland values in O'Brien County once again earned the label of priciest in the state in 2024.

The annual Iowa State University Land Value Survey found the average price per acre of O'Brien County farmland dipped from $16,313 in 2023 to $15,921 this year. The average was the most expensive in Iowa in 2024 and marked the second time in the last three years that O'Brien County topped the list. Last year, Sioux County took home first while O'Brien was tops in 2022.

Statewide, farmland values decreased 3.1 percent, or $369, to $11,467 per acre. The slump this year nearly erases the 3.7 percent increase from 2023 and ends a five-year trend of escalating prices.

"We saw land values rise for five straight years, including surges of 29 percent and 17 percent, which naturally leads to a reset or balancing in the market," said Dr. Rabail Chandio, who conducts the annual survey. "If we look back to the previous peak in 2013, the market adjusted with relatively small declines spread over a few years."

Clay County saw values decrease 5.6 percent on average from $13,887 per acre in 2023 to $13,114 this year. Overall, average farmland values in the 12-county Northwest Crop Reporting District – of which O'Brien and Clay counties are a part – were down 4.4 percent from the previous year to $14,109 per acre. The South Central Crop Reporting District was the only region to see an increase in land values.

Causes for the statewide value decline were varied. Chandio said that survey respondents noted falling commodity prices, persistently high interest rates, and elevated input costs as factors that have tightened profit margins and placed increasing downward pressure on land values across the state.

"It takes time – sometimes up to a decade – for interest rate changes to fully ripple through the land market; and, although rates recently dropped, with another cut on the horizon, it's not enough yet to ease the pressure from those earlier hikes as we move into 2025," she said. "If rates fall within a couple of years, we could see farmland values beginning to recover sooner. But if rate cuts take longer, we may see declines persist for another year or two."

Chandio expected lower commodity prices would also affect more than just land values – farm income is expected to fall 4.1 percent this year, following last year's 17.4 percent drop, as lower commodity prices weigh on cropcash receipts.

"While crop receipts are down, livestock receipts are up 8.4 percent, offering some balance," she said. "So, livestock markets, like cattle and hogs, have fared relatively better, but high input costs are still exerting enough pressure to keep margins very tight."

Seventy-five of Iowa's 99 counties showed a decrease in land values. While O'Brien County topped the list this year, Appanoose County reported the lowest value at $6,840 per acre; however, those values are an increase of $486, or 7.7 percent per acre.

Shelby County saw the largest dollar decrease with a loss of $1,170 per acre. Harrison County saw a decrease of 9.7 percent per acre, the largest percentage loss by a county. Wayne County saw the largest dollar increase, $690, in average values; however, Decatur County saw the largest percent increase in values at 10.5 percent. Osceola County reported the lowest percentage and dollar increase at less than 0.1 percent and $4 per acre, respectively.

In a reversal from last year, land values decreased in eight out of nine crop reporting districts. The West Central district saw the largest percent decrease (down 7.4 percent) and the largest dollar decrease (down $943) per acre, bringing average acre prices there to $11,798. The Northeast district saw the smallest percent decrease (down 1.5 percent) and the smallest dollar decrease occurred in the Southwest district, where average per-acre prices fell $165.

The South Central district is the only district that reported an overall percentage and dollar increase (up 3.6 percent /$272 per acre), brining average land values there to $7,754 per acre. Average prices are now highest in the Northwest ($14,109/acre) district and lowest ($7,754/acre) in the South Central district.