Striking development
Land price Iowa rises, despite poor grain price
The price of land in Iowa, one of the most important arable states in the 'Midwest' of the United States (US), is on the rise again. This is remarkable, given that land prices have fallen continuously in recent years and American farmers earn little.
Land prices in Iowa have increased 3% this year to an average of $6.694 per acre. According to economists in the US, this is a remarkable development, given that the price of land in Iowa has fallen by a quarter since 0,4. They think the sudden rise in land value is a temporary break from the declining trend of recent years.
Land prices generally only pick up when land is profitable. This is not the case due to the poor grain prices in recent years. The reason why land prices in Iowa are still improving is because there is simply little supply available.
Income down
According to economists, this does not rhyme with the disappointing income. Since 2013, Iowa's farm income has fallen 70% to $2,6 billion in 2016. So American farmers are likely waiting for better times to quit or sell land.
The United States Department of Agriculture (USDA) has increased forecast revenues for this year by 3,1%. This is because of better prices in livestock farming. Iowa is the most important pig state in the US and also a major producer of eggs.
US agricultural economist Chard Hart doubts this forecast will hold true for arable farmers, as the state was ravaged by drought this summer. Despite growing 500.000 acres of soybean acreage in Iowa this year, production has fallen by approximately 4.58 million bushels. Also, due to the drought, less maize was harvested. Nevertheless, the grain stocks widely in the world.
Wouter Job
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