The Iowa Farmland Grab

On Oct. 25, Iowa farmland set a record. Auctioneer Todd Hattermann and his partner, Rich Vander Werff, took turns taking bids as prices climbed for 80 acres in Sioux County. When bidding hit $20,000 per acre, says Hattermann, “you could hear a gasp in the room.” When bidding stopped at $21,900, there was applause.

High corn and soybean prices and low interest rates have made Iowa land an attractive investment. Even the worst U.S. drought since 1956 has done little to slow gains in farmland values. Nationwide, they’ve risen 31 percent in the past five years to $2,650 an acre, according to the U.S. Department of Agriculture. With exports at a record high and rising global populations and wealth prompting more food demand, many investors view farmland as a path to steady long-term returns, according to Michael Duffy, an agricultural economist at Iowa State University. “You have the yearly income of the crops and the long-term appreciation of the property,” he says.