AMES, Iowa — Iowa farmland value plummeted 8.9 percent, or $773 in value, now estimated to be $7,943 per acre in the past year – the biggest drop in 28 years, according to the 2014 Iowa Land Value Survey, released Dec. 18 by the Center for Agricultural and Rural Development (CARD) at Iowa State University.

“I think we have seen a peak for the time being,” said Michael Duffy, a retired ISU economics professor and extension farm management economist who conducted this year’s survey. “Commodity prices and farm income are settling back to more expected levels, and I think land values will probably move sideways for a while.

“Many people think this report indicates the beginning of another farm crisis, but land values are still considerably higher than they were just a few years ago.”

Conducted in November by CARD, the survey findings are similar to recent results found by the Iowa Farm & Land Chapter #2 Realtors Land Institute and the Federal Reserve Bank of Chicago. First initiated in 1941, the survey examines values by crop reporting districts, each of the 99 counties individually, low-, medium- and high-grade farmland and also averages the state as a whole.

Since farmland values don’t rise or fall uniformly across the state, the $7,943 per acre and 8.9 percent drop in value represents the state as a whole, the report stated.

While this year marks the largest decline in farmland values since 1986, it’s only the second year since 1999 the survey has shown a decline. After hitting a historic peak in 2013, values have returned to a midpoint between 2011 and 2012 values, the report said.

Despite the decrease, Iowa farmland values are more than double what they were 10 years ago, 81 percent higher than 2009 values and 18 percent higher than 2011 values, the report added. For the second year in a row, Scott (eastern Iowa) and Decatur (south-central) counties reported the highest and lowest farmland values, respectively. Decatur County reported a value per acre of $3,587, a drop of $41 from last year’s report.

The largest decrease in farmland value was in southwestern Iowa, which reported a drop of 13.5 percent. Worth County, located in the northeastern portion of the state, reported the largest percentage drop in value for any one county at 15.2 percent.

But the value of all grades of farmland fell, with high-grade land taking the largest hit and losing a full 9 percent ($974 per acre) of its value, said Duffy, who conducted the surveys for more than 30 years.

The report said the only crop reporting district to show an increase in values was southeastern Iowa, which reported values at 3.2 percent higher than last year. Keokuk County, located in southeastern Iowa, reported the largest percentage increase for any single county at 2.4 percent.

The report also stated when corn and soybean prices started falling in 2013, farm income dropped. The most recent USDA net farm income estimate showed a record high income in 2013, but a 23 percent drop for 2014.

Duffy said falling commodity prices, along with a drop in farmland value, could make problems for some farmers. “The drop in farmland value is due to the drop in commodity prices,” he said. “Pressure could come if farmers incurred debt in anticipation that commodity prices would continue. I think all farmers will have a cash flow problem for the next 18 months or so.”

Steve Bruere, president of Peoples Co., a Clive-based land brokerage and management firm, doesn’t think the 8.9 percent drop in land values in itself is going to cause much stress.

“If you see corn prices (which have been trading above $4 a bushel) with a $3 in front of it instead of a $4, then I think we’ll start to see some pain,” he said.