(Cedar Rapids Gazette) - Farmland values in Iowa continue to hold steady, with no drop in demand or price in the last few months.

Farmers National Co. of Omaha, with an office in Iowa City, attributes the stability to investor interest in quality land.

“Land is still a good investment for buyers, but they want the high-quality properties that hold value,” said Lee Vermeer, vice president of real estate operations at Farmers National. “We are seeing values on the top quality ground at or even above the peaks we saw in 2008. In some cases, it’s beyond that point, above the $7,000 per-acre mark.” Vermeer added that the desire for high-quality investments continues to push buyers away from the less-productive land.

Properties that are only partially arable or have nonproductive soils are moving slowly.

“Fewer landowners are willing to sell their property today, leading to fewer listings,” Vermeer said. “Fewer farms or ranches for sale, along with strong buyer interest, have helped to fuel the recent strength in the market.”

A huge divergence in prices exists in Iowa and Minnesota. Sam Kain, area sales manager for Farmers National, said high-quality land is bringing up to $7,000 an acre or more in Iowa and nearly $6,000 in Minnesota, while lower-quality parcels are drawing minimal interest and coming in at much lower prices. Average land is moving, as long as the price is right, but bidding wars are a thing of the past, Kain said.

A survey by the Iowa Farm and Land Chapter No. 2 of the Realtors Land Institute found that an acre of high-quality cropland was valued at $5,510 on March 1, up from $5,314 on Sept. 1, 2009. Medium-quality farmland rose in value from $4,084 an acre on Sept. 1 to $4,206 on March 1. Low-quality cropland also increased, from $3,415 an acre on Sept. 1 to $3,449 on March 1.

http://www.omaha.com/article/20100707/MONEY/707079969/1009