Iowa’s farmland values ​​posted the biggest gain among the five states, climbing 30% in 2021. Indiana’s farmland values ​​rose 22%, while Michigan’s rose 19%, Illinois 18% and Wisconsin 12%.

Economist David Oppedahl of the Federal Reserve Bank of Chicago and author of the Agricultural Newsletter, when asked if anyone expected farmland values ​​to rise at such a high rate, said farmland professionals “won’t be too surprised by these jumps given the amount of interest in farmland over the past year.”

Even adjusting for inflation, Oppedahl said the increases were significant, but there has been an increase in farm incomes in 2021, which, combined with low interest rates, has helped drive up the value of farms. farming lands.

According to the National Agricultural Statistics Service, the statistical arm of the United States Department of Agriculture, or USDA, from 2015 to 2020, farmers received less than $4 a bushel for corn. For 2021, farmers were receiving an average of $5.40 a bushel.

During the same period, from 2015 to 2020, soybean prices averaged below $10 a bushel, and often below $9 a bushel. Throughout 2019, soybeans stayed below $9 a bushel. Soybeans only hit the $9 per bushel mark in September and October 2020 and only hit the $10 mark in November and December 2020.

In 2021, farmers earned an average of $13.05 per bushel of soybeans.

Oppedahl said agricultural trade “grew sharply in 2021.”

“China is not the only buyer of our agricultural products, moreover there have been production problems in other parts of the world, and global tensions have affected food prices,” he said. he declares.

Oppedahl said, according to the survey, “a majority of bankers expect farmland values ​​to rise again in the first quarter of 2022. also continued in expectations of a larger capital purchase in 2022 by farmers”.

According to the Iowa Land Value Survey released in December by the Center for Agricultural and Rural Development of the Department of Economics at Iowa State University and Iowa State University Extension and Outreach, the value of farmland in Iowa in 2021 has increased an average of $2,192 per acre.

The average price for an acre of farmland in Iowa in 2020 was $7,559. This amount increased to $9,751 as of November 1.

Scott County had the highest land value of any county in the state, with farmland selling for $13,852 per acre. This represents a 30% increase from 2020, when farmland was selling for $10,659 per acre. This represents an increase of $3,193 per acre.

There is no comparable land value survey for Illinois like the one conducted by Iowa State University. However, the USDA released a 2021 cropland value survey in August that indicated Illinois cropland was valued at an average of $7,900 per acre.

Agricultural economist Wendong Zhang said there were uncertainties to watch out for.

The first is inflation in the United States, the highest since the 1980s. Higher interest rates may be needed to curb inflation. The value of farmland is sensitive to changes in interest rates should they occur.

High input costs for farmers are also a concern and could affect land values, Zhang said in the report. While current crop price and production cost projections indicate that growers should have a profitable 2022, the uncertainty of high input costs could erode profitability and when farmland values ​​will rise.

Third, there are concerns about the sustainability of current land values, and people are concerned about “a possible bursting of the bubble”. Zhang said.

However, current farm income growth is not significantly boosted by inflation, he said. Interest rates are still historically low and agricultural lenders are “following more conservative lending practices” than in the past, Zhang said.