The graph below is from our internal sales database. This includes 1,440 auction sales from 2023 to 2025 across 75 counties in Iowa with 70% or higher tillable land. The rating we calculate is $/Tillable CSR2 Point (CSR2 is a measure of the productivity of the soil with 0 being the lowest and 100 being the highest). You will notice basically no change in land values since 2023 for highly tillable farmland across the 75 counties, which is a good statewide summary but does not capture the differences in local land markets. This is pretty impressive when taking into consideration that corn and soybean prices are two-thirds what they were in 2023 and interest rates nearly double from 2022.
Iowa Farmland Values (2023–2025) — $/Tillable CSR2 Point
So, why are parties wanting to continue to own Iowa Farmland? While there are many good investment alternatives to farmland, we see clients, farmers, and landowners maintaining or growing their ownership in farmland primarily for these reasons:
Scarcity, Long-term Control, and Supportive of Transition Planning between Generations – Only about 1% of Iowa farmland is sold annually with most land owned for 25 years or greater. This scarcity of land that is held for the long-term provides a great avenue for generational transfer of wealth within families.
Portfolio Diversification and Inflation Hedge – Farmland is a very different asset class that is not highly correlated to the value of stocks or bonds. In addition, farmland historically holds up well during inflationary periods as crop prices and rents often rise with general price levels.
Total Returns, Savings Account, & Equity Build – Iowa Farmland returns over time are strong (Iowa State data shows total returns of 12.7% annually since 1970). On this return, annually up to 85% is due to appreciation, which can serve as a savings account. This “savings” account earns interest from rental income; or can be used to borrow against the equity built when it makes sense for a strategic purchase or for unplanned life events. The cash flow from renting the farmland provides a means to repay the borrowed equity.
Immobility, Indestructibility and Uniqueness – these characteristics of real estate certainly apply to farmland. These characteristics are very different from owning stock in a company that could be out of business in the future.
In summary, buyers of farmland have one, all, or even other reasons they continue to want to own more Iowa Farmland. Certainly, they have benefitted from the appreciation in value of holding land as part of their portfolio for a long time.
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