Some eye popping sale prices for land in the State of Iowa, no question about that, including a record set above $30,000. Yet what’s the average and how does that impacts most of us in a more realistic situation? Great question, so I asked it of Fallon Savage with our friends at Farm Credit Services of America, great Money Matters advocate and sponsor, who says that things really haven’t changed a whole lot in regard to the accurate land market, which is:
“Starting to stabilize. You’re right, it was really hot for a while, but it’s really starting to stabilize here in the fourth quarter of 2023. Very tight supply though as there’s just not a lot out there. So that’s really going to drive at this point, kind of where we’re starting to see values going forward and interest rates are having a really big impact on buying power.”
So will that change anytime soon?:
“Yeah, we don’t necessarily like to prognosticate where interest rates are going to go. You know, there’s a lot of of conversation out there, the feds kind of talking about maybe another bump up in interest rates. We’re not necessarily seeing anything extreme probably over the next year, instead probably settling in and where we’re at right now.”
So her take on the row crop and the land markets, what about to our friends in the livestock industry are, given that it’s been pretty brutal on the pork side in 2023:
“Probably in a little bit of an oversupply situation and we’re just seeing some pretty significant losses through 2023 and unfortunately it’s forecasted most likely into 2024. That’s requiring some kind of rebalance which means we’re probably going to need to see some of that supply come off the market”
Hopefully sooner rather than later, about five percent is her estimate of reduced supply for Iowa pork producers to get back into a margin positive position.