The average value of an acre of O'Brien County farmland is now the highest in Iowa.

The annual Iowa State Land Value Survey released this month reported a 20.6 percent increase in O'Brien County farmland prices in 2022 and a 20.3 percent increase in Clay County. O'Brien County's average now sits at $16,531 per acre of farmland, which was high enough to knock Scott County from the No. 1 slot and end its nine-year reign at the top of the survey.

The nominal value of an acre of farmland is again higher this year than at any point since ISU began surveying values in 1941. When adjusting for inflation, the 2022 average value surpasses the previous inflation-adjusted record value set in 2013 for the first time.

According to ISU associate professor of economics Dr. Wendong Zhang, who leads the annual survey, inflation played a major factor in the record land prices. However, he said commodity prices, limited land supply and low interest rates were bigger drivers.

"Farmers have a lot more cash on hand and supply chain issues led to a shortage of equipment, so the money that farmers normally spend on equipment is now devoted to land," he explained in his report. "Not only are crop prices much higher, livestock and poultry prices are also significantly higher, translating into higher farm income and profits."

Statewide farmland values increased by 17 percent on average. The increase was less than in 2021, when farmland values increased an average of 29 percent from the previous year.

O'Brien County's average price of $16,531 per acre was up from $13,713 the previous year, while Clay County saw an increase from $11,586 to $13,934 during the same timeframe. The overall average in the 12-county Northwest Iowa Crop Reporting District was more than the state median with a net percentage increase of 22.3 in 2022.

The numbers weren't exactly welcomed by Iowa farmers. For the first time, this year's survey asked respondents' views of current farmland values. Zhang reported that 70 percent of respondents feel that current land values are "too high" or "way too high."

"The higher land values do create an even higher entry barrier for beginning farmers, and the following increase in cash rents along with higher input costs could negatively affect producers, especially those with a lot of rented ground," he explained.

All 99 of Iowa's counties showed an increase in land values greater than 10 percent last year. While O'Brien County netted the top spot, Decatur County was last for the 10th-straight year. Land values there increased 10 percent, or $505 per acre to $5,566.

Mills, Fremont, Page and Montgomery counties reported the largest percentage increase, 21.6 percent, while O'Brien County saw the largest dollar increase, $2,818 per acre. Wayne, Lucas, Appanoose and Decatur counties saw the smallest percentage increase at 10 percent, while Decatur County saw the smallest dollar increase.

Land values increased across all crop reporting districts. The Northwest district reported the highest overall value, the largest percentage increase and the largest dollar increase per acre. The South Central district reported the lowest values at $6,824 per acre, and the lowest dollar change at $790 per acre. The Southeast district once again saw the smallest percentage increase, 9.8 percent.