The state of Iowa has a larger net worth following an increase in the value of Iowa farmland over the past year, according to a survey conducted by Iowa State researchers.

The average price of farmland in Iowa for 1996 was $1,682 per acre. Central Iowa had the highest land value at $2,090 per acre and south central Iowa had the lowest at $851 per acre.

The 15.6 percent average increase in Iowa farmland can be attributed to the high commodity prices last year, said Michael Duffy, professor of economics.

He said normally the price would only rise 3 to 5 percent, corresponding to the rising trend of inflation.

This year was the largest percentage increase since 1988, which followed the farm crisis of the mid-1980s, and the largest dollar increase since 1979, before the crash in land values.

Duffy said he predicts the land values to continue to increase but at a smaller percentage than this year because the commodity prices have fallen and become more stable. He does not think the rise in values will lead to another farm crisis.

The Iowa trend for higher land values matches closely with other Midwestern states, Duffy said.

The rise in farmland value is like a two-edged sword for college students with families who own farmland, Duffy said.

On one hand, it increases the net worth of their parents, thus increasing their ability to borrow money. However, rising values also mean a higher cost of entry for those who want to begin farming.

Existing farmers made up the largest group of land purchasers, accounting for 69 percent of the sales. Investors made 23 percent of the purchases and new farmers made four percent.

Other buyers, for uses like wildlife, made up the final four percent. Duffy said the percentage of new farmers making purchases was the smallest of all the groups, but they accounted for a little more than usual last year.

The amount of land being sold has not changed much with the increasing value, according to the survey.

The survey is co-sponsored by the Iowa Agriculture and Home Economics Experiment Station and the ISU Extension.