DES MOINES, Iowa (AP) — The average value of Iowa farmland declined 6 percent over the past year, and this is the first time those values have dropped for three years in a row since the 1980s farm crisis.
The Des Moines Register reports (http://dmreg.co/2hkU4Sq ) that Iowa State University estimates that Iowa farmland is now worth about $7,183 per acre on average. That’s 17.5 percent lower than the record set in 2013 of $8,716 per acre when crop prices were higher.
But assistant Iowa State University economics professor Wendong Zhang says the state is unlikely to see another crisis soon because farmers are generally in better financial shape.
Most Iowa farmers increased their financial reserves during the boom that preceded the current drop in crop prices. And Zhang said government safety nets are better than they were in the 1980s and interest rates remain low.
Plus, the overall debt level for farmers remains lower.
“For a pessimist, there are reasons to worry, especially for landowners . or producers who are over-leveraged,” Zhang said. “For an optimist, this decline is still modest, and the probability of a replay of the 1980s farm crisis is low.”
Even though a crisis doesn’t seem likely there are still farmers having a hard time today, said Bill Northey, Iowa’s Agriculture Secretary.
“There are some producers that are really struggling,” Northey said. “I imagine there will be farmers farming less ground next year . and maybe some that won’t be able to farm.”
Nationwide, farm income is projected to be $66.9 billion this year. That’s 46 percent lower than the record set in 2013. That means the average household income for the nation’s roughly 2 million family farms will be $118,890.
Corn prices have fallen nearly 60 percent in the last several years, and soybean prices have fallen roughly 40 percent. At the same time, many key costs have increased for farmers, including seed, herbicide and farmland rents.
Zhang said livestock producers have also been struggling.
“While corn and soybean prices continue to fall short of production costs, livestock producers faced a tougher environment in 2016 with hog, cattle and dairy prices all down by at least 30 percent compared to two years ago,” he said.
Iowa farmland prices haven’t dropped as much as incomes because there is still strong demand for the limited supply of land. But Zhang said farmland values might continue to decline for another year or two if crop prices remain weak.
Information from: The Des Moines Register, http://www.desmoinesregister.com
Copyright © The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
- 7 common ways to get sued by your employees
- Why it might be time to upgrade your toilet
- Arizona teachers are building a better future by using technology in the classroom
- How to make summer reading fun for the whole family
- How to find relief for chronic joint pain
- Can the NBA Lottery save the Suns?
- Skip Urgent Care: 5 ailments you can treat with telemedicine
- Skin Cancer in Arizona: Stats, facts and new immunotherapy drugs making strides
- Distracted walking injuries end up not so funny
- Scary situations: 5 quick tips before you let a contractor in your home
- Four ways telemedicine is changing the health care industry
- 5 mistakes homeowners make in the spring
- Three rivers run through it: Exploring Arizona's waterways
- Smart home basics: things you need to know to get started
- 5 Surprising things causing back pain
- Arizona agriculture is a $17.1B industry
- Timeline: Arizona's roots in brewing history
- 5 reasons to love the D-backs this season
- Tips for taking your home entertainment experience to the backyard
- Tech-related injuries your parents never experienced
- Workers comp: Signs your co-worker could be a fraud
- Who's the real founder of America's pastime?
- Epidemic rising? What you need to know about Alzheimer's in Arizona
- 5 unforgettable Wooden Award winners
- Family and hard work are keys to success of modern dairy farmers
- Genetic testing could hold answers for colon cancer survival
- Cold beers and baseball: A beer lover's guide to Spring Training
- Telecommuting: 5 tips to make it work for employers and employees
- See how top CFOs feel about economic growth in the Valley
- Migraine myths that keep patients from effective treatments
- Main Street Minute: Phoenix job fair will feature Army, bank representatives
- Border agents in Arizona drop from copter, snag suspects, 430 pounds of pot
- Teachers’ union leader surprised by Arizona Gov. Doug Ducey veto of bill
- Main Street Minute: Phoenix cracks top 10 for best US spots for meetings
- Main Street Minute: Fried chicken chain expanding in Valley