AMES, Iowa (AP) — Iowa farmland prices continued their boom in the past year and have more than doubled since 2008, according to a survey released Thursday.
The Des Moines Register reported (http://dmreg.co/163dbk0) that the survey by the Realtors Land Institute finds that prices increased nearly 18 percent since March 2012, to nearly $8,700 an acre. The institute figure was a little more than $4,200 in 2008.
The March figure is higher than the average price that Iowa State University farmland price survey showed through November — nearly $8,300 an acre.
The growth is being fed by high corn and soybean prices and the strong worldwide demand for grains, said Kyle Hansen of Nevada-based Hertz Farm Management, who led the survey committee.
Auctioneer Jeffrey Obrecht said strong farm incomes typically spur more spending on farm machinery and land.
"When farmers have money, they spend it on two things: iron and dirt," Obrecht said.
Previous land booms in the 1920s and 1970s ultimately led to price collapses, but Hansen said that's less likely now because financial institutions typically require down payments of up to 50 percent to finance land purchases to guard against speculation.
Hansen said prices couldn't keep soaring forever, but also noted that farmers have relatively low debt when compared against historic levels and demand remains high for corn.
"There is a lot of wealth out there," Hansen said.
Information from: The Des Moines Register, http://www.desmoinesregister.com