Continuing with the Iowa Farmland Values blog series, we will now be highlighting average farmland characteristics and production costs in Tama and Benton County. If you are interested in acquiring similar information, contact your local extension office or land grant institution within your state.

1 2019 ISU Land Value Survey conducted by the Center for Agricultural and Rural Development (CARD)
2 Iowa State University Extension and Outreach File C2-10 in Ames, Iowa
 

Successful Sales in Tama County, Iowa
Of the 462,300 total acres in Tama County, the average Corn Suitability Rating 2 (CSR2) for the 406,984 acres of farmland within the county is 70.3 with an average 2019 farmland value of $7,842 per acre, which is a 4.4% increase from $7,510 since 2018. To determine the CSR2 price per point average, divide the average farmland value ($7,842) by the Tama County CSR2 average (70.3), which equals $111.55 per CSR2 point.

The average cash rent per tillable acre across Tama County is $250 ($209-$290). The 2015-2019 average corn and soybean yield was 210 and 59 bushels per acre, respectively. The average rent per bushel of crop yield is calculated by cash rent divided by the average crop yield expected, which is $1.19 for corn and $4.24 for soybeans. Since beginning this blog series during the middle of September 2020, commodity markets have risen an additional 10-20% and corn and soybean futures are currently over $4.00 and $10.50 per bushel, respectively. One may still expect to spend approximately one-third of the per bushel revenue on cash rents.

The capitalization rate, or also commonly referred to as cap rate, is the rate of return on a real estate property based on the income that the property is expected to generate for the landowner. The cap rate can help evaluate and compare the risk of one property or market to another, where it depends on demand, available inventory within the area, and specific type of property. The cap rate for Tama County farmland is around 3.19%, or an expected return on investment of almost three and a quarter percent.

1 2019 ISU Land Value Survey conducted by the Center for Agricultural and Rural Development (CARD)
2 Iowa State University Extension and Outreach File C2-10 in Ames, Iowa

Successful Sales in Benton County, Iowa

Of the 459,800 total acres in Benton County, the average Corn Suitability Rating 2 (CSR2) for the 420,639 acres of farmland within the county is 78.9 with an average 2019 farmland value of $8,336 per acre, which is a 4.3% increase from $7,994 since 2018. To determine the CSR2 price per point average, divide the average farmland value ($8,336) by the Benton County CSR2 average (78.9), which equals $105.65 per CSR2 point.

The average cash rent per tillable acre across Benton County is $246 ($211-$280). The 2015-2019 average corn and soybean yield was 203 and 59 bushels per acre, respectively. The average rent per bushel of crop yield is calculated by cash rent divided by the average crop yield expected, which is $1.21 for corn and $4.17 for soybeans. Since beginning this blog series during the middle of September 2020, commodity markets have risen an additional 10-20% and corn and soybean futures are currently over $4.00 and $10.50 per bushel, respectively. One may still expect to spend approximately one-third of the per bushel revenue on cash rents.

The cap rate for Benton County, Iowa farmland is around 2.95%, or an expected return on investment less than three percent.

To get in contact with someone about your Tama County or Benton County farm in Iowa, please call Matt Adams (515.423.9235; matt@peoplescompany.com) or Doug Bear (515.745.3192; doug.bear@peoplescompany.com).

Tillable Acres for all the counties can be found HERE.

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