(Radio Iowa) — The new Iowa State University Land Value Survey released today (Wednesday) shows a small drop in land values. Iowa State University economist Wendong Zhang says values dropped just under one percent (.08). He says that puts the average values of an acre of land in the state at to seven-thousand-264 dollars. That’s 62 dollars an acre less than last year’s survey. Zhang says farmland prices peaked in 2013 at a just above 87-hundred dollars an acre ($8.716).

“For the last five years we have seen four declines — despite last year in 2017 there was a two percent increase — we have seen a steady decline off the peak,” Zhang says. Zhang says he has been asked repeatedly in the last five years if there is a concern about another collapse in values like we saw in the 1980’s. He says he is not concerned. “Overall I think the key message from this survey is ‘yes we are seeing downward pressure we are seeing a modest pressure, but overall we are seeing stabilizing land markets,” Zhang says. “There is no sign of sudden collapse. Overall, when you are looking at the district and county line changes — the county that declined the most only declined by about three percent

Humboldt and Wright Counties reported the largest percentage decrease in value at three-point-three percent. Zhang says there has been a drop in farm income that’s led to the drop in land values brought on in part by big crops. He says we’ve seen the six and seventh largest crops in the last six or seven years and he says there’s also been a rebound in the beef and pork markets, as well as an increase in pork processing. Zhang says the cost of money is another issue driving land prices.

“The second largest factor that people mention is a higher interest rate,” according to Zhang. “Over the last year, over the last three years actually, the Federal Reserve has been raising the interest rates.” He says the trade wars have also played some role. “The impacts of the tariffs on the economy is felt more by the agricultural states like Iowa,” Zhang explains. He expects land values to see another small dip next year — as he says new tariffs and other factors take some time before they are felt in land values.

“Typically its an income decline last year that affects this year’s land values. So it takes some time for the land markets to fully capitalize what’s happening in commodity prices…and the Federal Reserve interest rate hikes are a key factor in this,” Zhang says. Zhang says a trade deal with China could have some impact. “If you look at the commodity markets, just the sign that the two sides are talking gave a 50 cent bump in the commodity futures market,” Zhang says. He says that bump eventually went back down, but he says it shows the impact potential that is there.

Scott and Decatur counties held onto the highest and lowest farmland value spots for the sixth straight year. Decatur County had a value of three-thousand-488 dollars ($3,488) an acre. That’s an increase of eight dollars. Scott County reported a value of ten-thousand-537 ($10,537) dollars, which was an increase of 40 dollars an acre. The south-central district reported the largest percentage increase of three-point-eight (3.8) percent. The central and southeast districts reported decreases of two-point-four (2.4) percent and three-point-six (3.6) percent, respectively. The northeast and southwest districts reported no notable change in value.

(Radio Iowa) — Iowa’s two U.S. Senators parted ways in Tuesday’s approval of a new five-year Farm Bill. Joni Ernst voted in favor of the compromise bill, which now goes to the House. Chuck Grassley was one of just 13 Republicans voting against the bill.  “It’s the small and medium-sized farmers that needs the help from the government. Not these big, big farmers and corporate farmers that we’re going to end up helping the way this bill is written,” Grassley, a farmer from New Hartford, said on the floor of the Senate.

Grassley’s payment limitation amendment was removed from the Farm Bill in conference committee. He’s fought for years to place “hard caps” on subsidies from the government, saying the largest ag operations and even non-farmers are benefiting the most. “I’m more than just a little disappointed,” Grassley said. “Especially when the impact of large farmers being allowed to manipulate the system is that young and beginning farmers face even larger hurdles.”

Grassley said farm policy should be “a limited safety net” to help farmers recover from natural disasters and other “unforeseen challenges.” This bill, he said, goes well beyond that. “Today, we have a Farm Bill that is intentionally written – and I want to emphasize intentionally written – to help the largest farmers receive unlimited subsidies from the federal government,” Grassley said. Senator Joni Ernst served on the conference committee that drafted the compromise. In a prepared statement, she praised the bill as “farmer-focused” and said it includes her provisions to reform the Conservation Reserve Program and provide “critical mental health support” through the FARMERS FIRST Act.