Farmland Trends: DreamDirt’s Jason Smith Watches for the ‘Iowa Effect’

Sales volume is up a little. Prices are, too. But higher quality farmland may be the surprise: farmland values have dropped from what DreamDirt Farm Real Estate and Auction Company founder Jason Smith has seen lately.

Smith has three offices in Iowa, but he also does work in Illinois, Minnesota, South Dakota, Nebraska, and Missouri. 

American Farmland Owner asked him to analyze farmland trends in his region. For Smith, that means witnessing something that he has not seen in the 20 years he has owned his business.

AFO: “What trends are you seeing in farmland sales right now?”

Smith said he was surprised when he looked at the numbers, but sales volume is slightly higher compared with the same period a year ago.

Sales Volume

In April 2024 his company sold 2,938 acres of land. In April 2025 it was 2,971.  

Farmland owners are apprehensive about selling right now. “There’s the potential of more volume right now, but people are holding back because of the political situation in the United States.”

The unknowns of President Donald Trump’s global trade war, cuts to farm programs, and the potential that the U.S. could head into recession may have farmers apprehensive about what is ahead.

“There are so many questions and so much up in the air,” Smith explained. “When you look at input costs for farmers and when they have to pay more money for the product, the profitability goes down. And when their profitability goes down, they can’t pay as much for farmland. And I think that is the super simple thought that some would-be sellers have right now.”

Sale Prices

Smith said he is seeing a slight increase in the average price per acre of farmland. Most of his business comes from the sale of estates and trusts. 

“Since December of ‘24, every month we have seen an increase in average price per acre of farmland. When you compare month to month the trend line currently shows up. Now, that does not mean we haven't had some down months. Last year’s July and August results were fairly high, so that helps the trendline come up.”

Smith shared DreamDirt’s sale prices:

Average Price per tillable acre

• April 2024 = $11,829.21

• April 2025 = $13,853.79 

However, DreamDirt’s data showed that higher sale prices were not evident in all land quality levels.

High CSR2 land sales

Higher quality farmland is selling for less money, Smith has observed as he compared land with a higher Corn Sustainability Rating (CSR2).

“Dollars per CSR point actually have a down trend line and are decreasing,” he said.  

This is what DreamDirt’s numbers show:

Average price per CSR2 point

• April 2024 = $184.52

• April 2025 = $165.77

Smith said, “So, even though your dollars per acre are higher…when you compare using quality, it appears we are seeing a decrease in farmland values right now.”

That is not something that Smith has seen before. “In my 20 years, it's the first time I have seen that trend.”

AFO: “Why is this happening?”

“It's the premium that’s built into the high-quality farmland, and this may be the first time it's ever really kind of stepped out of the trees and let people see it,” Smith said. “We have always suspected that there's a premium. In other words not every acre is created equally.”

The “Iowa Effect”

At DreamDirt, Smith keeps a close eye on what is happening in Iowa, collecting information on all the sales each month because of something he calls the “Iowa Effect.” He describes it like this: “What happens in Iowa tends to happen in the surrounding states next. We believe the ‘Iowa Effect’ is real,” he said.  

Iowa trends tend to spread, Smith believes. “It’s a good Midwestern indicator for the United States.”

AFO: “Who is buying, and who is not buying farmland right now?” 

Neighbors are still driving many farmland sales, Smith said.

“Still to this day, farmers that live within, say five or six of the land up for sale are always going to be the best bidders. If they live connected to the farm, if it’s behind them, beside them, in front of them, they are going to be a very, very strong bidder.”

Smith said that DreamDirt measures competition by the average number of bidders and bids at each auction. And he noticed a change. “We started to see the average number of bidders per auction go down. And it wasn’t the neighbor we were losing, it was those outside investors.”

This began to happen in the middle of 2024. He said the landowner who does not farm the property or the people who have been using agricultural land as a safe investment, are not as active at auctions right now. 

“Early to mid ‘24 and into ‘25, that’s when we saw a reduction in bidders. Those bidders (investors) were out, but we were still dealing with the local farmer.”

AFO: “What farmland auction trends are you seeing?”

Smith said that frequently in Iowa, a “live outcry” auction is used to sell farmland. An auctioneer calls out ascending bids to a room full of potential buyers. But Smith said he has noticed farmland selling in a different way.

“We are very much seeing a trend where a certain kind of auction is taking over. The sealed bid auction.”

Smith added, “It's always been a thing when people get nervous. Some auction companies will steer people to a sealed bid auction, or a blind bidding auction where everyone submits their highest bid instead of having an ascending bid. We have seen a lot more of that over the last three months for sure.”