Pay dirt: Iowa farmland value soaring again

First in a series. For part two, click here . For part three, click here .

WATERLOO, Iowa --- Click, click, click, click. Up it goes.

People buying and selling Iowa farmland have been on a roller coaster ride the past 30 years. It has made some cheer and others sick to their stomachs.

For most of the past decade, prices have steadily climbed. Reports indicate values soared by about 24 percent this year.

According to the U.S. Department of Agriculture, the average value of cropland statewide this year is $5,700 per acre. Land brokers and buyers say high-quality soil easily sells for thousands more.

"Goodness gracious, I can't take a breath because it keeps going up," said Dave Hommel, a rural Ivester farmer describing recent land auctions he has attended. "Farmers are holding on to their chairs with both hands, and lawyers for estates are just smiling."

A year ago, Hommel paid $9,000 per acre for a 60-acre tract.

Landowners have been on this ride before.

Farmland more than quadrupled in price from 1971 to 1981. A sharp descent followed, the primary cause of the farm crisis in the mid-1980s. It is considered the worst time in agriculture since the Great Depression. Forced farm auctions in the Corn Belt were common.

There is fear among growers and agriculture experts it could happen again.

"Maybe not as prolonged, but in two years we could have another crash. Paying $10,000 to $15,000 an acre for ground will come back to bite you. ... I'm fairly confident about this," said Larry Depping, a farmer near Reinbeck.

Many economists, land brokers and growers think land values will probably drop in the future. But will the so-called land price bubble burst?

Experts don't believe a repeat of the '80s is likely. The fundamentals that led to the increase in land prices and the financial stability of growers are far different today than three decades ago.

RON PAUL IN DEAD HEAT IN IOWA « The Burning Platform

This ain’t over until the fat lady sings. The MSM shunning of Ron Paul has not worked. He can win the Iowa Caucus. Contibute today.

Herman Cain , Ron Paul , Mitt Romney and Newt Gingrich are in a dead heat as the top choices for Iowans likely to attend the Jan. 3 Republican presidential caucuses.

A Bloomberg News poll shows Cain at 20 percent, Paul at 19 percent, Romney at 18 percent and Gingrich at 17 percent among the likely attendees with the caucuses that start the nominating contests seven weeks away.

Economic issues such as jobs, taxes and government spending are driving voter sentiment, rather than such social issues as abortion and gay marriage, the poll finds. Only about a quarter of likely caucus-goers say social or constitutional issues are more important to them, compared with 71 percent who say fiscal concerns.

The poll reflects the race’s fluidity, with 60 percent of respondents saying they still could be persuaded to back someone other than their top choice, and 10 percent undecided. Paul’s support is more solidified than his rivals, while Cain’s is softer. All of the major contenders have issue challenges to address.

“In Iowa , it’s long been a two-person race between Romney and someone else,” said J. Ann Selzer, president of Selzer & Co. , which conducted the poll for Bloomberg. “It is now a four- person race between Romney and three someone elses.”

Poll participant Nate Warwick, 34, a machine operator at a packaging factory who lives in Story City, Iowa, is leaning toward Romney, primarily because he thinks he has the best chance of defeating President Barack Obama in 2012. Still, he’s not excited about his choices.

“There’s nobody out there who is really grabbing my attention, wholly,” he said. “I don’t think the Republican Party has a candidate that can beat Obama right now.

Low

Iowa, The Middle Land

Iowa

Cost

Why Iowa?, How Caucuses and Sequential Elections Improve the Presidential Nominating Process