Poll of Iowa Farmers Warns of Farmland Bubble
By George Ford, The Gazette
CEDAR RAPIDS, Iowa -- A majority of the farmers responding to a statewide poll believe Iowa farmland is overvalued and prices are much higher than the land is worth.
Sixty-eight percent of the producers responding to the 2012 Iowa Farm and Rural Life Poll agreed that farmland values are too high and cannot be sustained at current levels. Forty-eight percent agreed that "the farmland market is in a bubble that will eventually burst and lead to major drops in values."
Other farmers were more optimistic, with 41 percent believing that land values will continue to rise, but at a slower pace. More than 60 percent of the poll participants agreed that quality cropland is still a good investment.
Asked to rate the impact of a number of factors on recent farmland price escalation, 85 percent agreed or strongly agreed that high corn and soybean prices was the most influencial factor driving higher prices. Seventy-two percent believe competition between neighboring farmers who want to expand their land also is a major influence boosting land prices at auctions.
Two-thirds or 66 percent of farmers indicated that low returns on other types of investments was a strong or very strong influence. Seventy-one percent of survey respondents agreed that rising land prices have led to intensification of farming.
Fifty-four percent of the survey respondents indicated that non-operator landowners have benefited from increases in land values more than have farmers. Forty percent of farmers agreed that producers have benefitted from increased in land values.
At the same time, 97 percent of those responding to the poll agreed and strongly agreed that higher land prices have driven up cash rents. Ninety-one percent said higher farmland prices have made it harder for the next generation to enter farming.
This year's Iowa Farm and Rural Life Poll focused on a range of issues important to farmers and all Iowans. On average, participants were 64 years old.
Most participants draw a significant proportion of their overall household income from farming. Fifty-one percent of participants reported that farm income made up more than half of their 2011 household income, and an additional 18 percent earned between 26 and 50 percent of their household income from the farming.
The annual Iowa Farm and Rural Life Poll is conducted by Iowa State University Extension and Outreach, along with the Iowa Agriculture and Home Economics Experiment Station, the Iowa Department of Agriculture and Land Stewardship and Iowa Agricultural Statistics. At 30 years, it is the longest-running survey of its kind in the nation.