Farmland values continue to increase - KWWL - Eastern Iowa Breaking News, Weather, Closings

Farmland values continue to increase

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BLACK HAWK COUNTY (KWWL) -

Farmland values across the state of Iowa continue to soar. With the recent housing crisis causing problems in so many places across the country, many farmers are wondering if the farmland bubble could burst.

Vince McFadden has been farming since the mid 1980's. During that time McFadden has seen a giant swing in farmland value.

"Land has been going up pretty steadily the last five or six years and it's kind of a combination of things where there's a perfect storm right now where we have high demand for our product and low supply because of weather issues around the world. It just keeps going up and interest has been very low historically right now and the stock market, some investors would return go into farmland then the stock market right now," said McFadden.

According to farming experts, the price of crops is the main reason for the increase in land value.

"We used to think of a penny or two change was a major change now we see 21 cents how much the market is off today and sometimes it's 40 or more cents per bushel so there's quite a volatile on this particular commodity," said Rod Hamer of the ISU Black Hawk County Extension Office.

"Hopefully we're at the peak for the corn and soybean prices because we're really going to hurt demand long term, I mean world wide. I worry about the demand for the ethanol and for live stock producers that have to the corn and soybeans. So hopefully they'll level off and go a little lower," said McFadden.

Experts in this field say farmland value can not continue to go up at this rate like it has been over the past few years, but they say the short term outlook appears strong.

According to the Iowa State University 2010 Farmland Value Survey, all 99 counties saw an increase per acre. In Black Hawk County, farmland per acre increased from around $5400 in 2009 to around $6400 in 2010.

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