Transcript Slide 1

Iowa Farmland
Realtors Land Institute
December 6, 2004
Michael Duffy
Outline
Background
Land Values
I.
II.
i.
ii.
III.
IV.
V.
VI.
Rate of Return
Expectations
Land Ownership Trends and
Implications
Land Rents and Rental Arrangements
Costs of Production
Are we set up for another fall?
Distribution of Iowa's Land, 2002
40
35
Million Acres
30
25
20
15
10
5
0
Total area
Total land
Land in farms
Acres harvested
Iowa Farmland





68 percent of land is harvested
62 percent of the land is in corn or
soybeans
68 percent of the land in farms is in
corn or soybeans
Iowa farmland valued at
approximately $73B
91 percent of land is in farms
Percent of Farmland* in Corn, Soybeans
Lyon
87%
Osceola
91%
Dickinson
88%
Emmet
90%
Winnebago
92%
Worth
90%
Mitchell
88%
Howard
79%
Floyd
88%
Chickasaw
83%
Winneshiek Allamakee
58%
35%
Kossuth
94%
Sioux
89%
OBrien
91%
Clay
88%
Palo Alto
92%
Hancock Cerro Gordo
95%
92%
Humboldt
Cherokee Buena Vista Pocahontas
95%
82%
92%
95%
Plymouth
83%
Woodbury
77%
Ida
86%
Monona
82%
Sac
92%
Crawford
82%
Harrison
82%
Shelby
87%
Webster
93%
Calhoun
94%
Carroll
87%
Audubon
79%
Wright
95%
Greene
90%
Guthrie
68%
Franklin
92%
Hamilton
93%
Boone
88%
Dallas
84%
Butler
87%
Hardin
89%
Story
89%
Grundy
93%
Jasper
78%
Fayette
77%
Clayton
53%
Black Hawk Buchanan
91%
88%
Tama
79%
Marshall
86%
Polk
84%
Bremer
87%
Benton
83%
Poweshiek
70%
Iowa
65%
Delaware
76%
Linn
76%
Dubuque
49%
Jones
71%
Cedar
83%
Johnson
70%
Mills
87%
20% - 40%
40% - 60%
60% - 80%
80% - 100%
Fremont
86%
Cass
74%
Adair
60%
Montgomery Adams
74%
53%
Page
68%
Taylor
49%
Madison
46%
Union
40%
Ringgold
29%
Warren
49%
Clarke
25%
Decatur
24%
*Does not include land in building sites or woodlands.
Marion
59%
Lucas
22%
Wayne
37%
Mahaska
72%
Monroe
26%
Appanoose
23%
Keokuk Washington
63%
72%
Louisa
78%
Wapello
54%
Davis
33%
Jefferson
58%
Van Buren
42%
Henry
70%
Lee
65%
Clinton
82%
Scott
89%
Muscatine
79%
Pottawattamie
84%
Jackson
39%
Des Moines
81%
Percent of Farmland* Idled, in Cover Crops,
Unharvested, Failed, or Abandoned
Lyon
Osceola
Dickinson
Emmet
Winnebago
Worth
0.9%
4.2%
3.3%
2.2%
4.8%
4.4%
Mitchell
Howard
3.7%
7.7%
Winneshiek
Allamakee
9.5%
12.3%
Fayette
Clayton
5.7%
13.5%
Kossuth
Sioux
OBrien
Clay
Palo Alto
2.1%
1.8%
3.1%
3.7%
Plymouth
Cherokee
3.3%
1.5%
1.9%
Ida
Sac
Calhoun
6.9%
3.9%
1.7%
2.1%
2.8%
2.0%
1.9%
Woodbury
Cerro Gordo
2.4%
Humboldt
Buena Vista Pocahontas
2.0%
Hancock
Webster
3.2%
Floyd
Chickasaw
5.0%
4.4%
Wright
Franklin
Butler
2.5%
2.4%
4.6%
Hamilton
Hardin
Grundy
3.3%
2.6%
2.5%
Bremer
4.1%
Black Hawk
Buchanan
Delaware
Dubuque
3.1%
2.4%
5.2%
9.1%
Jackson
Monona
Crawford
Carroll
Greene
Boone
Story
Marshall
3.8%
3.4%
2.9%
2.5%
3.1%
4.5%
4.4%
Tama
Benton
Linn
5.9%
4.6%
5.6%
Jones
14.0%
6.2%
Clinton
Cedar
Harrison
Shelby
Audubon
Guthrie
Dallas
Polk
Jasper
Poweshiek
Iowa
4.0%
3.4%
7.9%
7.7%
3.3%
3.9%
5.2%
8.5%
12.6%
6.1%
4.4%
Johnson
Scott
8.3%
2.5%
Muscatine
7.0%
Pottawattamie
Cass
Adair
Madison
Warren
Marion
Mahaska
Keokuk
Washington
4.1%
6.3%
8.1%
7.9%
11.1%
11.4%
11.0%
14.5%
11.7%
Louisa
9.0%
Mills
Montgomery
Adams
Union
Clarke
Lucas
Monroe
Wapello
Jefferson
3.6%
7.1%
10.6%
10.3%
13.3%
15.4%
10.6%
12.3%
14.4%
Henry
10.2%
Des Moines
4.9%
Fremont
Page
Taylor
Ringgold
Decatur
Wayne
Appanoose
Davis
Van Buren
4.5%
7.6%
17.3%
14.8%
13.8%
15.2%
13.4%
13.7%
13.4%
Lee
8.4%
*Does not include land in building sites or woodlands.
1% - 4%
4% - 8%
8% - 11%
11% - 18%
Percent of Farmland* in Hay and Oats
Lyon
Osceola
Dickinson
Emmet
Winnebago
Worth
4.3%
2.5%
3.1%
1.6%
1.5%
2.2%
Mitchell
Howard
3.6%
6.4%
Winneshiek Allamakee
16.6%
18.3%
Fayette
Clayton
7.9%
15.0%
Kossuth
Sioux
OBrien
Clay
Palo Alto
3.7%
2.3%
2.7%
1.4%
Plymouth
1.5%
1.4%
Humboldt
Cherokee Buena Vista Pocahontas
3.7%
3.3%
1.4%
Hancock Cerro Gordo
0.9%
1.0%
Woodbury
Ida
Sac
Calhoun
3.9%
3.5%
2.6%
1.0%
1.6%
Floyd
Chickasaw
3.1%
5.5%
Bremer
Wright
Franklin
Butler
0.7%
1.9%
3.0%
Hamilton
Hardin
Grundy
1.0%
1.9%
1.2%
4.8%
Black Hawk Buchanan
Webster
1.1%
2.7%
Dubuque
Delaware
4.0%
20.7%
9.6%
Jackson
Monona
Crawford
Carroll
Greene
Boone
Story
Marshall
2.8%
4.3%
3.4%
2.3%
2.9%
2.1%
2.7%
Tama
Benton
Linn
4.9%
4.2%
6.2%
Jones
14.8%
7.7%
Clinton
Cedar
Harrison
Shelby
Audubon
Guthrie
Dallas
Polk
Jasper
Poweshiek
Iowa
2.8%
3.6%
4.7%
5.8%
3.1%
4.5%
5.3%
8.1%
6.6%
Johnson
Scott
10.0%
3.4%
Muscatine
Pottawattamie
Cass
Adair
Madison
Warren
Marion
Mahaska
Keokuk
Washington
3.6%
6.1%
10.1%
11.0%
11.0%
8.5%
4.6%
5.2%
5.3%
4.8%
Louisa
3.9%
Mills
1% - 4%
4% - 9%
10% - 12%
14% - 21%
Montgomery Adams
Union
Clarke
Lucas
Monroe
Wapello
Jefferson
2.9%
4.9%
8.0%
13.7%
18.0%
16.7%
16.5%
10.5%
9.8%
Fremont
Page
Taylor
Ringgold
Decatur
Wayne
Appanoose
Davis
Van Buren
2.0%
6.1%
8.4%
15.9%
15.1%
15.1%
20.4%
17.7%
14.2%
Henry
5.6% Des Moines
3.3%
*Does not include land in building sites or woodlands.
4.8%
3.9%
Lee
7.8%
Percent of Farmland* in Pasture**
Lyon
Osceola
Dickinson
Emmet
Winnebago
Worth
8.2%
1.9%
5.1%
5.9%
1.7%
3.0%
Mitchell
Howard
4.7%
7.0%
Winneshiek Allamakee
Kossuth
Sioux
OBrien
Clay
Palo Alto
5.2%
5.3%
6.0%
2.9%
Plymouth
2.7%
1.6%
Cherokee Buena Vista Pocahontas
10.1%
13.3%
4.0%
Hancock Cerro Gordo
Humboldt
2.3%
2.4%
Woodbury
Ida
Sac
Calhoun
12.8%
6.8%
3.9%
3.2%
3.3%
Floyd
Chickasaw
3.7%
6.9%
16.1%
34.8%
Fayette
Clayton
9.0%
18.5%
Bremer
Wright
Franklin
Butler
1.9%
3.4%
5.1%
Hamilton
Hardin
Grundy
2.4%
6.2%
3.1%
4.0%
Black Hawk Buchanan
Webster
3.2%
3.4%
Dubuque
Delaware
5.3%
21.1%
9.6%
Jackson
Monona
Crawford
Carroll
Greene
Boone
Story
Marshall
11.9%
10.2%
6.3%
5.3%
6.5%
4.7%
7.1%
Tama
Benton
Linn
10.0%
7.7%
11.8%
Jones
32.0%
15.2%
Clinton
Cedar
Harrison
Shelby
Audubon
Guthrie
Dallas
Polk
Jasper
Poweshiek
Iowa
11.5%
6.4%
8.0%
18.7%
9.5%
7.2%
11.3%
12.9%
16.0%
8.9%
Johnson
Scott
12.0%
5.0%
Muscatine
Pottawattamie
Cass
Adair
Madison
Warren
Marion
Mahaska
8.8%
13.8%
21.7%
35.0%
28.5%
21.0%
12.1%
9.3%
Keokuk Washington
17.5%
10.5%
Louisa
8.7%
Mills
2% - 5%
5% - 15%
15% - 30%
30% - 47%
Montgomery Adams
Union
Clarke
Lucas
Monroe
Wapello
Jefferson
6.3%
13.5%
28.5%
35.6%
44.1%
45.4%
46.7%
23.2%
18.3%
Fremont
Page
Taylor
Ringgold
Decatur
Wayne
Appanoose
Davis
Van Buren
8.0%
18.7%
25.0%
40.9%
46.9%
32.8%
43.6%
36.1%
30.4%
Henry
13.9%Des Moines
11.2%
*Does not include land in building sites or woodlands.
**Includes both woodland and rangeland pasture.
7.6%
Lee
18.9%
Percent of Farmland in Woodlands, Houses,
Ponds, Roads, and Wasteland
Lyon
Osceola
Dickinson
Emmet
Winnebago
Worth
5.4%
4.1%
3.9%
3.8%
5.6%
5.1%
Mitchell
Howard
6.2%
8.6%
Winneshiek
Allamakee
14.4%
30.2%
Fayette
Clayton
10.0%
22.0%
Kossuth
Sioux
OBrien
Clay
Palo Alto
4.6%
4.8%
5.1%
4.3%
Plymouth
4.1%
3.5%
Humboldt
Cherokee Buena Vista Pocahontas
5.2%
5.7%
5.2%
Hancock Cerro Gordo
Woodbury
Ida
Sac
Calhoun
7.3%
5.8%
6.0%
4.4%
Floyd
Chickasaw
6.0%
7.3%
Bremer
Wright
Franklin
Butler
4.4%
5.3%
7.0%
Hamilton
Hardin
Grundy
4.9%
5.4%
3.7%
5.3%
4.4%
4.2%
7.3%
Black Hawk Buchanan
Webster
5.9%
6.5%
Delaware
Dubuque
10.0%
15.2%
6.2%
Jackson
Monona
Crawford
Carroll
Greene
Boone
Story
Marshall
9.1%
7.0%
6.3%
6.2%
8.5%
5.6%
6.3%
Tama
Benton
Linn
7.0%
6.8%
11.0%
Jones
18.5%
11.3%
Clinton
Cedar
Harrison
Shelby
Audubon
Guthrie
Dallas
Polk
Jasper
Poweshiek
Iowa
8.6%
5.0%
7.2%
9.5%
7.7%
6.8%
7.6%
9.1%
12.4%
Johnson
Scott
10.0%
5.5%
Muscatine
Pottawattamie
Cass
Adair
Madison
Warren
Marion
Mahaska
Keokuk
Washington
6.7%
6.0%
8.6%
14.5%
13.8%
12.4%
10.2%
11.9%
11.0%
10.9%
Louisa
12.3%
Mills
Montgomery
Adams
Union
Clarke
Lucas
Monroe
Wapello
Jefferson
8.8%
7.6%
9.1%
11.0%
14.6%
21.0%
19.1%
16.2%
16.8%
Fremont
Page
Taylor
Ringgold
Decatur
Wayne
Appanoose
Davis
Van Buren
9.1%
9.6%
11.5%
12.1%
16.0%
10.9%
16.6%
16.3%
Henry
15.2%Des Moines
12.0%
20.7%
Lee
18.2%
3.5% - 6.0%
6.0% - 10.0%
10.0% - 15.0%
15.0% - 31.0%
7.5%
8.3%
Farms
Sales
$5
$2
$1
00
50
00
$5
$4
$2
$2
$1
.5
to
to
$9
$4
$3
$2
>
$9
99
$4
99
M
99
99
99
99
99
99
99
99
$1
,9
,9
,9
9,
9
9,
9
9,
9
4,
9
$2
49
to
to
to
to
9,
9
9
9
,9
9
,9
9
$9
$4
9
0
,4
9
,0
0
$2
$1
$1
to
to
to
to
to
0
0
5
0
0
$5
$2
$1
<
Percent of Iowa Farms and Sales by Sales Class, 2002
30%
25%
20%
15%
10%
5%
0%
-30%
-40%
Farms
Sales
$5
$2
$1
-20%
00
50
00
$5
$4
$2
$2
$1
.5
to
to
$9
$4
$3
$2
>
$9
99
$4
99
M
99
99
99
99
99
99
99
99
$1
,9
,9
,9
9,
9
9,
9
9,
9
4,
9
$2
49
to
to
to
to
9,
9
9
9
,9
9
,9
9
$9
$4
9
0
,4
9
,0
0
$2
$1
to
to
to
to
0
0
5
0
0
$5
$2
to
$1
-10%
$1
<
Percent Change in Iowa Farms and Sales by Sales Class,
1997-2002
70%
60%
50%
40%
30%
20%
10%
0%
Farms
to
to
to
to
,4
99
$9
,9
99
$4
,9
99
$2
,0
00
$9
9,
99
9
$4
9,
99
9
$2
4,
99
9
to
to
to
$1
Land
>
$1
M
$2
49
,9
$2
99
50
to
$4
99
,9
$5
99
00
to
$9
99
,9
99
$1
00
$5
0
$2
5
$1
0
$5
$2
.5
$1
<
Percent of Iowa Farms and Land by Sales Category, 2002
30%
25%
20%
15%
10%
5%
0%
Iowa Farm Output, Total Expenses, and Net Farm
Income
$16,000,000
$14,000,000
$12,000,000
$10,000,000
$8,000,000
$6,000,000
$4,000,000
$2,000,000
Output
Net Income
Total Expenses
03
20
00
20
97
19
94
19
91
19
88
19
85
19
82
19
79
19
76
19
73
19
70
19
67
19
64
19
61
19
58
19
55
19
52
19
19
49
$0
Iowa Direct Government Payments
$2,500,000
$2,000,000
$1,500,000
$1,000,000
$500,000
03
20
00
20
97
19
94
19
91
19
88
19
85
19
82
19
79
19
76
19
73
19
70
19
67
19
64
19
61
19
58
19
55
19
52
19
19
49
$0
Iowa Net Farm Income as a Percent of Gross Income
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
03
20
00
20
97
19
94
19
91
19
88
19
85
19
82
19
79
19
76
19
73
19
70
19
67
19
64
19
61
19
58
19
55
19
52
19
19
49
0%
Government Payments as a Percent of Net Farm
Income
160%
140%
120%
100%
80%
60%
40%
20%
03
20
00
20
97
19
94
19
91
19
88
19
85
19
82
19
79
19
76
19
73
19
70
19
67
19
64
19
61
19
58
19
55
19
52
19
19
49
0%
Government Program Payment Distribution, 1995 to 2002
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Top 1%
Top 10%
Top 20%
US
Iowa
80%
Distribution of Government Payments, 2003
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Top 1%
Top 10%
US
Top 20%
Iowa
80%
Rate of Return
Capitalization Rate




2002 land taxes
$10 land management fee
ISU Extension Estimated Costs of
Production, Land Values, and Cash
Rents
Government payment data from
Environmental Working Group
Figure 1: 2003 Weighted Rental Capitalization Rate
Lyon
3.7%
Osceola Dickinson Emmet
4.0%
3.9%
3.2%
Sioux
O'Brien
Clay
Palo Alto
3.2%
3.4%
3.5%
3.6%
Plymouth
3.7%
Kossuth
Winnebago Worth
3.8%
3.7%
3.8%
Mitchell Howard
3.8%
4.0%
WinneshiekAllamakee
HancockCerro Gordo Floyd Chickasaw
4.3%
3.9%
3.9%
4.0%
Humboldt
CherokeeBuena Vista
Wright
Pocahontas
3.5%
3.8%
3.9%
3.4%
3.6%
Franklin
4.1%
Butler
4.2%
Bremer
4.5%
4.4%
Fayette
Clayton
4.4%
4.8%
3.4%
BuchananDelaware Dubuque
Black Hawk
Woodbury
Ida
Sac
Calhoun
Hamilton Hardin Grundy
3.7%
4.0%
4.2%
3.7%
3.5%
4.6%
4.2% 3.9%
3.8%
3.5%
4.1%
3.9%
Jackson
Jones
Tama Benton
4.0%
Linn
Monona Crawford Carroll Greene Boone
Story Marshall
3.7%
3.7%
4.2%
3.1%
5.2%
4.4%
3.3%
3.9%
3.8%
3.5%
3.5%
Clinton
Cedar
4.4%
Harrison Shelby Audubon Guthrie Dallas
Jasper Poweshiek Iowa
Polk
Johnson 3.4%
Scott
4.4%
4.4%
4.5%
4.0%
4.1% 4.8% 4.2%
3.0%
3.9%
3.4%
Muscatine 3.2%
Webster
4.1%
Marion Mahaska KeokukWashington
Louisa
3.5%
3.1%
3.8%
4.0%
4.0%
2.9%
4.2%
4.7%
4.6%
4.0%
Mills MontgomeryAdams Union Clarke Lucas Monroe Wapello Jefferson
Henry
Des Moines
5.2%
5.4%
4.8%
4.0%
3.4%
3.1%
3.5%
5.0%
4.1%
3.1%
3.4%
Fremont Page
Taylor Ringgold Decatur Wayne Appanoose Davis Van Buren
4.2%
4.1%
3.6%
4.0%
3.9%
4.0%
3.7%
4.8%
5.0%
Lee
Pottawattamie
Cass
Adair
Madison Warren
3.4%
Cap Rate
0.0% - 3.5%
3.5% - 4.0%
4.0% - 4.5%
4.5% - 6.0%
Figure 2: Average Net Income per Acre at Mid Prices
Lyon
146.35
Sioux
160.47
Plymouth
129.64
Osceola Dickinson Emmet
148.47 131.72 135.58
Winnebago Worth
144.63 143.91
Mitchell Howard
140.55 142.40 WinneshiekAllamakee
Kossuth
137.93
124.96
O'Brien
Clay Palo Alto 144.56 HancockCerro Gordo Floyd Chickasaw
153.81 138.84 135.26
145.18 145.75 145.50 146.80
Fayette Clayton
Humboldt
Bremer
152.57 150.92
Cherokee
Buena Vista
Pocahontas
Wright Franklin Butler
137.57
156.47
139.52 137.97 137.84
141.79 144.42 141.45
Black HawkBuchananDelaware Dubuque
Woodbury
Grundy 156.99 153.98 164.87 156.18
116.91
153.11
Jackson
Jones
132.45
Tama Benton
Linn
Monona Crawford Carroll Greene Boone
Story Marshall
160.23
150.79 164.00 147.56
108.78
113.81
125.04 129.47 131.28 137.17 144.33
Clinton
165.99
Cedar
Iowa
Harrison Shelby Audubon Guthrie Dallas
Poweshiek
Jasper
Polk
Johnson 168.94
Scott
108.20
145.04 147.73
144.95
122.11 117.30 108.94 124.67 131.73
138.93
176.81
Muscatine
146.06
Pottawattamie Cass
Adair Madison Warren Marion Mahaska KeokukWashington
121.92
107.48 107.88 96.21 107.13 116.92 137.30 129.67 143.18 Louisa
136.13
Mills MontgomeryAdams Union Clarke Lucas Monroe Wapello Jefferson
Net Income
Henry
100.27 116.00 94.37
79.70 111.10 112.12
85.34
87.13
98.70
Des Moines
128.07
$70 - $110
134.23
Fremont Page
Taylor Ringgold Decatur Wayne Appanoose Davis Van Buren
$110 - $130
86.96
94.96
86.12
112.03 100.65 101.34 92.13
89.18
74.79
Lee
$130 - $150
111.59
$150 - $180
Webster
Ida
Sac
Calhoun
Hamilton Hardin
137.22
129.97 129.71 132.03
140.73 148.03
Figure 4: Income Capitalization Rate
with $2.45 Corn and $5.75 Soybean
Lyon
5.6%
Sioux
5.2%
Plymouth
5.1%
Osceola Dickinson Emmet
5.8%
5.8%
5.0%
Winnebago Worth
6.5%
6.1%
Mitchell Howard
7.3% WinneshiekAllamakee
5.8%
Kossuth
7.2%
7.6%
5.4%
O'Brien
Clay Palo Alto
HancockCerro Gordo Floyd Chickasaw
5.1%
5.3%
5.3%
5.9%
5.4%
6.4%
6.3%
Fayette Clayton
Humboldt
Bremer
7.1%
6.7%
Cherokee
Buena Vista
Pocahontas
Wright Franklin Butler
5.2%
5.9%
5.8%
5.0%
5.0%
5.1%
5.6%
5.6%
Black HawkBuchananDelaware Dubuque
Woodbury
Ida
Sac
Grundy 5.3%
5.7%
6.4%
6.0%
5.1% 4.8%
5.7%
4.9%
Jackson
Jones
6.2%
Tama Benton
Linn
Monona Crawford Carroll Greene Boone
Story Marshall
6.0%
5.9%
6.4%
5.0%
5.7%
5.2%
4.6%
4.6%
5.0%
5.1%
4.8%
Clinton
6.1%
Cedar
Harrison Shelby Audubon Guthrie Dallas
Jasper Poweshiek Iowa
Polk
5.6%
Johnson
Scott
7.3%
5.2%
7.1%
6.3%
5.5% 5.9% 5.5%
4.7%
5.3%
5.1%
4.8%
Muscatine
5.8%
Pottawattamie Cass
Adair Madison Warren Marion Mahaska KeokukWashington
5.6% Louisa
5.0%
6.3%
7.0%
6.5%
5.3%
5.4%
5.7%
7.3%
6.3%
Cap Rate
Mills MontgomeryAdams Union Clarke Lucas Monroe Wapello Jefferson
Henry
6.6%
5.3%
6.3%
6.5%
6.6%
7.6%
7.3%
6.8%
6.6%
Des Moines
5.4%
4.6 - 5.2
5.2%
Van
Buren
Fremont Page
Taylor Ringgold Decatur Wayne Appanoose Davis
5.2 - 5.7
6.4%
7.8%
7.9%
5.5%
7.4%
5.7%
8.0%
7.1%
9.1%
5.7 - 6.5
Lee
6.5 - 9.1
5.6%
Webster
Calhoun
Hamilton Hardin
4.9%
4.7%
4.9%
5.9%
Figure 6: Average Government Payments, 1995-2003
Lyon
Osceola
Dickinson
Emmet
$39.21
$41.72
$42.20
$47.31
Sioux
O'Brien
Clay
Palo Alto
$42.21
$41.71
$45.90
$45.96
Cherokee Buena Vista Pocahontas
Plymouth
$39.38
$34.78
Woodbury
$47.94
Ida
Mitchell
Howard
$51.64
$47.60
$42.08
$44.31
Hancock
Cerro Gordo
Floyd
Chickasaw
$47.72
$49.61
$46.70
$47.20
$46.59
Humboldt
Wright
$44.39
$41.67
$44.31
Franklin
$47.43
Webster
Calhoun
$40.42 $39.71
$41.07
Worth
Kossuth
$43.93
Sac
Winnebago
Winneshiek
Allamakee
$40.36
$30.80
Fayette
Clayton
$46.34
$38.30
Black Hawk Buchanan
Delaware
Dubuque
$44.39
$49.87
$41.01
Bremer
Butler
$49.20
$45.71
Hamilton
Hardin
Grundy
$43.88
$47.05
$45.88
Monona
Crawford
Carroll
Greene
Boone
Story
Marshall
$35.24
$33.87
$37.98
$40.39
$41.10
$39.73
$44.29
$45.21
$47.59
Jackson
Benton
Tama
Linn
$45.29
$43.69
Jones
$40.17
Clinton
Cedar
Harrison
$31.45
Shelby
Audubon
$40.82 $41.91 $35.36
Pottawattamie
$36.62
Cass
$38.42
Madison
Adair
$34.91
Polk
Jasper
Poweshiek
Iowa
$37.03
$39.31
$40.01
$41.16
Dallas
Guthrie
$27.77
$23.15
Warren
$27.62
Marion
$30.99
$35.48
$46.23
Mahaska
$41.39
Keokuk
$45.20
$49.37
Johnson
$39.86
Muscatine
$49.64
Scott
$49.08
$42.71
Washington
Louisa
$45.93
$47.07
Mills
Montgomery
Adams
Union
Clarke
Lucas
Monroe
Wapello
Jefferson
$33.78
$35.45
$30.87
$26.72
$27.00
$23.96
$18.50
$33.39
$38.96
Fremont
Page
Taylor
Ringgold
Decatur
Wayne
Appanoose
Davis
Van Buren
$32.87
$29.03
$30.53
$26.88
$21.75
$27.89
$21.68
$24.89
$24.65
Henry
$41.71
Des Moines
$42.76
Lee
$30.24
Dollars
$15 - $30
$30 - $40
$40 - $50
$50 - $60
Figure 7: Capitalized Value of Government Payments
as a Percentage of Land Value
Lyon
41%
Osceola Dickinson Emmet
47%
43%
56%
Winnebago Worth
59%
60%
Mitchell Howard
WinneshiekAllamakee
58%
47%
Kossuth
46%
42%
46%
Sioux
O'Brien
Clay Palo Alto
HancockCerro Gordo Floyd Chickasaw
44%
42%
51%
51%
47%
49%
54%
51%
Fayette Clayton
Buena Vista
Humboldt
Bremer
38%
47%
Plymouth
Cherokee
Pocahontas
Wright Franklin Butler
49%
51%
44%
38%
41%
48%
48%
49%
44%
Buchanan
Delaware Dubuque
Black Hawk
Webster
Woodbury
Ida
Sac
Calhoun
Hamilton Hardin Grundy
40%
49%
43%
45%
44%
45%
38%
39%
43%
44%
47%
39%
Jackson
Jones
42%
Tama Benton
Linn
Monona Crawford Carroll Greene Boone
Story Marshall
48%
45%
45%
46%
37%
36%
44%
42%
37%
46%
41%
Clinton
Cedar
43%
Harrison Shelby Audubon Guthrie Dallas
Jasper Poweshiek Iowa
Polk
50%
Johnson
Scott
47%
35%
45%
44%
46%
44%
50%
43%
40%
41%
Muscatine 42%
42%
Pottawattamie Cass
Adair Madison Warren Marion Mahaska Keokuk
WashingtonLouisa
52%
42%
58%
54%
43%
45%
40%
41%
41%
55%
Mills MontgomeryAdams Union Clarke Lucas Monroe Wapello Jefferson
Percentage
Henry
44%
34%
40%
51%
44%
78%
57%
36%
43%
58%Des Moines
0% - 40%
51%
Fremont Page
Taylor Ringgold Decatur Wayne Appanoose Davis Van Buren
40% - 45%
43%
49%
54%
41%
59%
41%
63%
44%
54%
Lee
45% - 50%
46%
50% - 100%
Land Compared to Dow Jones





Yearly Dow Jones Industrial
dividend reported by Dow Jones
USDA/Economic Research Service
rent values
ISU Extension land values
Assume $1,000 invested with
returns reinvested
Land tax is only ownership cost
assumed
Value of $1000 invested in 1950 - Iowa Land and Dow Jones
$350,000.00
$300,000.00
$250,000.00
$200,000.00
$150,000.00
$100,000.00
$50,000.00
Land
Dow Jones
2001
1998
1995
1992
1989
1986
1983
1980
1977
1974
1971
1968
1965
1962
1959
1956
1953
1950
$0.00
Value of $1000 Invested in 1970 - Iowa Land and Dow Jones
$45,000
$40,000
$35,000
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
Land
Dow Jones
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
1978
1976
1974
1972
1970
$0
Value of $1000 Invested in 1980 - Iowa Land and Dow Jones
$25,000
$20,000
$15,000
$10,000
$5,000
Land
Dow Jones
2002
2000
1998
1996
1994
1992
1990
1988
1986
1984
1982
1980
$0
Value of $1,000 Invested in 1990 In Iowa Land or Dow Jones
$6,000
$5,000
$4,000
$3,000
$2,000
$1,000
$0
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Land
Dow Jones
Total Value in 2003 of $1,000 Invested in Year X in
Land or Dow Jones
$350,000
$300,000
$200,000
$150,000
$100,000
$50,000
$0
19
50
19
53
19
56
19
59
19
62
19
65
19
68
19
71
19
74
19
77
19
80
19
83
19
86
19
89
19
92
19
95
19
98
20
01
Value
$250,000
Land Returns
DJI Returns
Total Value in 2003 of $1,000 Invested in Year X in Land or
Dow Jones
$25,000
$20,000
$15,000
$10,000
$5,000
Land
Dow Jones
20
02
20
00
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
82
19
80
$0
19
50
19
53
19
56
19
59
19
62
19
65
19
68
19
71
19
74
19
77
19
80
19
83
19
86
19
89
19
92
19
95
19
98
20
01
Percent Difference
Difference Between Land Value and DJI as Percent of
DJI
80%
60%
40%
20%
0%
-20%
-40%
-60%
-80%
-100%
Land Expectations


ISU survey released Dec. 14, 2004
Federal Reserve estimation;


USDA/ERS estimate;


2% increase 3rd Quarter; 12% increase July to
July
$2,200 per acre; 9.5% increase Jan. to Jan.
Chapter estimate;

14.4% increase September to September
20
01
19
98
19
95
19
92
19
89
19
86
19
83
19
80
19
77
19
74
19
71
19
68
19
65
19
62
19
59
19
56
19
53
19
50
Average Iowa Land Values
$2,500
$2,000
$1,500
$1,000
$500
$0
-10%
-20%
-30%
20
02
19
99
19
96
19
93
19
90
19
87
19
84
19
81
19
78
19
75
19
72
19
69
19
66
19
63
19
60
19
57
19
54
19
51
Percent Change in Iowa Land Values
40%
30%
20%
10%
0%
Iowa Farm Land Values Adjusted for Inflation,
1982 - 1984 Dollars
$3,000
$2,500
$2,000
$1,500
$1,000
$500
20
01
19
98
19
95
19
92
19
89
19
86
19
83
19
80
19
77
19
74
19
71
19
68
19
65
19
62
19
59
19
56
19
53
19
50
$0
Yearly Percent Change in Inflation Adjusted Iowa Land
Values, 1982 - 1984 Dollars
30.0%
20.0%
10.0%
-20.0%
-30.0%
-40.0%
20
02
19
99
19
96
19
93
19
90
19
87
19
84
19
81
19
78
19
75
19
72
19
69
19
66
19
63
19
60
19
57
-10.0%
19
54
19
51
0.0%
Percent Change in Sales Activity from Previous Year
60%
50%
40%
30%
20%
10%
0%
1986 1987 1988 1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
More
Less
Same
Who Purchased Iowa Farmland
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
Existing Farmers
Investors
New Farmers
Other
Land Ownership Trends



Telephone survey conducted by ISU
Statistical Laboratory
Data as of July 1 , 2002
633 useable responses, 80%
response
Distribution of Iowa Farmland by Age of Owner and Year
25%
20%
15%
10%
5%
0%
< 25
25-34
35-44
1982
45-54
1992
55-64
2002
65-74
> 75
Distribution of Iowa Farmland by Ownership Type and
Year
45%
40%
35%
30%
25%
20%
15%
10%
5%
0%
Sole Owners
Joint
tennants
Tennants in
common
1982
Pertnerships
1992
Estates
2002
Trusts
Corporations
Distribution of Iowa Farmland by Tenure Type
60%
50%
40%
30%
20%
10%
0%
Owner operator
Cash rent
1982
Crop share rent
1992
2002
Government
Distribution of Iowa Farmland by Financing Method and Year
80%
70%
60%
50%
40%
30%
20%
10%
0%
Free of debt
Under contract
1982
1992
Mortgaged
2002
Percent of Iowa Farmland by Residence of Owner
100%
90%
80%
70%
60%
50%
40%
30%
20%
10%
0%
Iowa Resident
Non-Iowa Resident
1982
1992
2002
Anticipated Method for Transfering Iowa Farmland
40
35
Percent of Farmland
30
25
20
15
10
5
0
Will to
family
Will to
other
Give to
family
Give to
others
Sell to
family
Sell to
others
Put in
trust
Other
DK
Land Rents and Rental
Arrangements
Cash Rent Comparison - 1996 to 2004
Lyon
34%
Sioux
26%
Plymouth
35%
Osceola Dickinson Emmet
24%
30%
21%
Winnebago Worth
15%
18%
Mitchell Howard
WinneshiekAllamakee
25%
23%
Kossuth
19%
38%
21%
O'Brien
Clay Palo Alto
HancockCerro Gordo Floyd Chickasaw
33%
22%
19%
19%
24%
13%
33%
Fayette Clayton
Humboldt
Bremer
37%
24%
CherokeeBuena Vista
Pocahontas
Wright Franklin Butler
11%
25%
25%
16%
14%
15%
25%
31%
Black HawkBuchananDelaware Dubuque
Grundy
42%
25%
26%
34%
17%
Jackson
Jones
30%
Tama Benton
Linn
Monona Crawford Carroll Greene Boone
Story Marshall
31%
29%
11%
25%
31%
23%
22%
26%
18%
31%
27%
Clinton
Cedar
31%
Harrison Shelby Audubon Guthrie Dallas
Jasper Poweshiek Iowa
Polk
Johnson 17%
Scott
31%
28%
25%
28%
27%
20%
13%
16%
25%
28%
Muscatine 28%
44%
Pottawattamie Cass
Adair Madison Warren Marion Mahaska KeokukWashington
14% Louisa
17%
30%
22%
22%
12%
41%
35%
18%
28%
% Change
Mills MontgomeryAdams Union Clarke Lucas Monroe Wapello Jefferson
Henry
33%
22%
33%
12%
38%
25%
38%
31%
30%
14%Des Moines
0% - 15%
19%
Van
Buren
Davis
Fremont Page
Taylor Ringgold Decatur Wayne Appanoose
15% - 25%
18%
38%
36%
29%
36%
33%
25%
44%
43%
25% - 35%
Lee
35% - 45%
18%
Woodbury
26%
Ida
40%
Sac
20%
Calhoun
26%
Webster
Hamilton Hardin
19%
27%
22%
Iowa Cash Rent and Land Value
$2,500
$140
$120
$2,000
$100
$1,500
$80
$60
$1,000
$40
$500
$20
$0
19
50
19
53
19
56
19
59
19
62
19
65
19
68
19
71
19
74
19
77
19
80
19
83
19
86
19
89
19
92
19
95
19
98
20
01
20
04
$0
Values
Rents
Percent Change in Land Values and Rents
40%
30%
20%
10%
-20%
-30%
-40%
Land Values
Rents
20
04
20
02
20
00
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
82
19
80
19
78
19
76
-10%
19
74
19
72
0%
20
02
20
00
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
82
19
80
19
78
19
76
19
74
19
72
Rent as a Percent of Value for Iowa Farm Land
12%
10%
8%
6%
4%
2%
0%
Percent of Leased Farmland Acres in Iowa
70%
60%
50%
40%
30%
20%
10%
0%
Written Lease
Lease to relative
Professional
Manager
Fixed Term
Owner lives on
property
Percentage of Leased Farmland by Type of Lease
80%
70%
60%
50%
40%
30%
20%
10%
0%
1982
Cash rent
1992
Crop share
2002
Other rent arrangements
Percent of Leased Acres in Iowa by Characteristic
70%
60%
50%
40%
30%
20%
10%
0%
Percent of
leased acres
Written Lease
Cash
Lease to
relative
Professional
Manager
Crop Share
Fixed Term
Owner lives on
property
Average Length of Tenure by Lease Type
18
16
14
Years
12
10
8
6
4
2
0
Cash
Crop Share
Costs of Production
Distribution of Corn Costs of Production, 2004
Machinery
22%
Land
36%
Labor
6%
Seed, Chem, etc
36%
Corn Cost Distribution Over Time
45%
40%
35%
30%
25%
20%
15%
10%
5%
Machinery
Seed, chem.,etc
Labor
Land
20
04
20
02
20
00
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
82
19
80
19
78
19
76
19
74
19
72
0%
20
04
20
02
20
00
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
82
19
80
19
78
19
76
19
74
19
72
Corn Estimated Cost per Bushel
$3.00
$2.50
$2.00
$1.50
$1.00
$0.50
$0.00
Distribution of Soybean Costs of Production, 2004
Machinery
14%
Land
47%
Seed, Chem., etc
31%
Labor
8%
Soybean Cost Distribution Over Time
60%
50%
40%
30%
20%
10%
Machinery
Seed, Chem., etc
Labor
Land
20
04
20
02
20
00
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
82
19
80
19
78
19
76
19
74
19
72
0%
Soybean Estimated Cost per Bushel
$7.00
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
20
04
20
02
20
00
19
98
19
96
19
94
19
92
19
90
19
88
19
86
19
84
19
82
19
80
19
78
19
76
19
74
19
72
$0.00
Percentage Change in Costs of Production per Bushel
with Increasing Energy Costs
7.0%
6.0%
5.0%
4.0%
3.0%
2.0%
1.0%
0.0%
10%
25%
50%
Energy Price Increase
Cont. Corn
Rotated Corn
Percentage Change in Soybean Cost Per Bushel with
Changes in Energy Prices
1.0%
0.9%
0.8%
0.7%
0.6%
0.5%
0.4%
0.3%
0.2%
0.1%
0.0%
10%
25%
Energy Price Increase
50%
Corn Total Direct Cost Per Bushel, 2003
$2.20
$2.15
$2.10
Dollars Per Bushel
$2.05
$2.00
$1.95
$1.90
$1.85
$1.80
$1.75
$1.70
< 100
100 - 400
401 - 800
Number of Row Crop Acres
801 - 1200
>1200
Corn Total Economic Cost Per Bushel, 2003
$4.50
$4.00
Dollars Per Bushel
$3.50
$3.00
$2.50
$2.00
$1.50
$1.00
$0.50
$0.00
< 100
100 - 400
401 - 800
801 - 1200
Number of Row Crop Acres
>1200
Corn Direct Cost Per Bushel by Profit Group, 2003
$2.50
Dollars Per Bushel
$2.00
$1.50
$1.00
$0.50
$0.00
High Third
Middle Third
Low Third
Profit Group Categories
All Groups
Soybean Total Economic Cost Per Bushel, 2003
$14.00
$12.00
Dollars Per Bushel
$10.00
$8.00
$6.00
$4.00
$2.00
$0.00
< 100
100 - 400
401 - 800
Number of Row Crop Acres
801 - 1200
> 1200
Soybean Total Direct Cost Per Bushel, 2003
$7.50
$7.00
$6.50
$6.00
Dollars Per Bushel
$5.50
$5.00
$4.50
$4.00
$3.50
$3.00
$2.50
$2.00
$1.50
$1.00
$0.50
$0.00
< 100
100 - 400
401 - 800
801 - 1200
Number of Row Crop Acres
> 1200
Soybean Direct Cost Per Bushel, 2003
$8.00
$7.00
Dollars Per Bushel
$6.00
$5.00
$4.00
$3.00
$2.00
$1.00
$0.00
Low Third
Mid Third
High Third
Cost Group Category
All Groups
Are we setting ourselves up for a fall?
($5,000)
2004
2001
1998
1995
1992
1989
1986
1983
1980
1977
1974
1971
1968
1965
1962
1959
1956
1953
1950
1947
1944
1941
1938
1935
Million
US Agricultural Balance of Trade
$30,000
$25,000
$20,000
$15,000
$10,000
$5,000
$0
Ag Trade Balance and Iowa Land Values
$30,000
$2,500
$25,000
$1,500
$15,000
$10,000
$1,000
$5,000
$500
$0
($5,000)
$0
Trade Balance
Land Values
Land Values
$20,000
19
50
19
53
19
56
19
59
19
62
19
65
19
68
19
71
19
74
19
77
19
80
19
83
19
86
19
89
19
92
19
95
19
98
20
01
20
04
Ag. Balance, Million Dollars
$2,000
US Ag Exports and Iowa Land Values
$2,500
$60,000
$2,000
$1,500
$40,000
$30,000
$1,000
$20,000
$500
$10,000
$0
$0
exports
land values
Iowa Land Values
$50,000
19
50
19
53
19
56
19
59
19
62
19
65
19
68
19
71
19
74
19
77
19
80
19
83
19
86
19
89
19
92
19
95
19
98
20
01
20
04
Value of US Exports, Million Dollars
$70,000
Conclusions



Iowa farmland owners are aging and
the trend will continue for the next
several years
There will be a considerable amount of
Iowa’s farmland change hands over the
next few years. More than likely this
land will be passed on to the next
generation and not even enter the
market.
There will continue to be an increase in
the amount of land owned by people
outside the state.
Conclusions



Land ownership patterns will change
with fewer sole owners and more
multiple owners
More land will be rented and cash
rents will increase in prevalence
Second generation may have
different views towards land
Conclusions




Less debt against the land
Different category of purchasers
Fewer contracts
Factors to watch




Government programs
Interest rates
Exchange rates
Deficit