SMLV Conference Canceled for 2020, Survey Results Project Modest Declines in Land Values

Ames, IA – Iowa State University’s longest-running conference has been canceled for the year due to the ongoing COVID-19 pandemic. The 93rd Soil Management and Land Valuation Conference was originally scheduled for May; however, it was later postponed until August and has now been canceled altogether. This marks the first cancellation of this event since World War II.

“We had hoped a postponement would allow us to continue with the traditional conference at some point this year,” said Wendong Zhang. “But because of ongoing uncertainties and social distancing requirements posed by the pandemic, we’ve decided against it,” he said. Zhang is an assistant professor of economics at Iowa State and has been in charge of the SMLV conference since 2016.

“However, one conference tradition was not broken,” Zhang said. “Since the 1960s we’ve surveyed attendees about land value trends and crop prices. This year we sent the survey electronically and got a similar response rate to previous years.” Zhang said a detailed analysis of survey results will be available in a forthcoming Ag Decision Maker newsletter in July.

Nearly half of the survey respondents were agricultural lenders, according to Zhang. The remaining respondents were farm managers, realtors, brokers, and rural appraisers. “Our average survey respondent has twenty-six years of agricultural experience and provides services in nine counties—these are generally experienced agricultural professionals.”
The survey asked respondents to estimate land values and cash crop prices in their service area at four short-term points and two long-term points. The results generally show that experts are forecasting a modest decline in farmland values over the next eighteen months, but feel generally optimistic about future values. They also anticipate a slight increase in corn and soybean cash prices.

“Overall, survey results show respondents forecast a decline in land values of just over 2% from May to November 2020. They further extend that to an additional decline in land values of just over 1% from May 2020 to November 2021,” Zhang said. However, as the timeline of the estimates increased, respondents provided increasingly positive outlooks. “Nearly 40% of respondents expect higher land values eighteen months from now,” Zhang said. Additionally, the survey results show professionals expect a 10% increase in land values from 2020 to 2025 and a 45% increase from 2020 to 2040.

“Respondents cited lower interest rates, good crop yields and strong demand amid tight land supply as main factors driving up land values,” Zhang said. “Some of our other recent research supports the role of lowered interest rates in land values. It appears the 2020 rate cut will dominate the interest rate impact for the foreseeable future; and, beginning in 2021, the net effects of interest rate changes on farmland values will become positive.”

As for corn and soybean cash prices, the survey shows experts are predicting prices at $3.05/bushel and $8.21/bushel, respectively, this November. Furthermore, they’re expecting those prices to increase slightly to $3.57/bushel and $9.05/bushel, respectively, two years from now, which, Zhang said, may reflect respondents anticipating improvements in soybean trade with China.

The next annual Soil Management and Land Valuation Conference is set for May 12, 2021.

For over 60 years, the Center for Agricultural and Rural Development at Iowa State University has conducted innovative public policy and economic research on local, regional, and global agricultural issues, combining academic excellence with engagement and anticipatory thinking to inform and benefit society.

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