A survey showing Iowa's farmland values dropped for the first time in nearly 10 years does not surprise the region's agricultural experts.
The northwest district, including Storm Lake, saw a dramatic decrease of 11.5 percent for the past six months after recent years of steadily climbing prices. Only a segment of west central Iowa saw a larger decrease, 14 percent.
The survey released Tuesday by the Realtors Land Institute indicates farmland values statewide declined by an average of 7.6 percent in the past six months. That hasn't happened since September 1999.
Iowa State University farm economist Mike Duffy said the decline fits a trend that began late last year. "It's reflective of a lot of the problems in the overall economy, agriculture in particular," Duffy said. "We had that run up for the last couple of years due to the ethanol boom. The bloom came off that rose."
Troy Louwagie, a trends and values chairman with the institute, said the overall numbers are not as bad when paired with last September's 6.6 percent increase.
Duffy says farmers continue to see commodity prices decline while they must also absorb escalating costs, especially for fertilizer.
Although the land value changes decrease farmers' net worth and borrowing power, the effect on their day-to-day, out-of-pocket expenses will be minimal.
"It isn't anything people are happy about, but it's also not the end of the world," Duffy said.
High-quality farmland is now selling at an average of $5,297 per acre, down from $5,619 in September.
Some see a silver lining in the new numbers.
The downturn could help new farmers get into the business, said Mike Walsten, special projects manager at the Professional Farmers of America.
He took the news in stride, saying the last decade of good news almost necessitated this kind of year. "It was time for a correction," he said.
With the overall economy in bad shape, Duffy said a bit of positive news is that farmers are faring relatively well.
"Hopefully right now, agriculture isn't being hit as hard as some of the other industries," Duffy said. "But this shows we're not immune."