WATERLOO - VH-1 might love the '80s, but farmland owners didn't.

The music channel's hit television series about the decade highlights all that was cool, like the advent of music videos and leg warmers. Many farmers have a different memory. Land prices tumbled, contributing to widespread farm failures and financial problems in the Midwest.

But farmland values in Iowa have risen 14.3 percent in the last year, according to Iowa State University's annual farmland value survey.

On average, an acre of farm ground cost $4,468 statewide in 2008, according to the survey released Tuesday.

Survey coordinator Mike Duffy believes land is a good investment. Values have increased nine years in a row.

However, the ISU economist said the good times may be done for a while. The faltering national economy, falling commodity prices and high crop input costs are starting to affect land sales negatively, experts said.

While Duffy doesn't expect values to plummet 30.2 percent as in 1985 at the height of the farm crisis, the rapid climb is probably over.

"The unbridled exuberance we witnessed the past 24 months has been curtailed. I think the land values will retreat some from the highs, but not go into the free-fall we witnessed in the 1980s," Duffy said in a press release Tuesday.

"With the last couple of months so unsettled, I don't know where it will go from here," Duffy added later.

"Some (auctions) are still strong and other auctions were stopped because they didn't reach the minimum bid."

Farmers have experienced two years of profitable commodity prices. Futures contracts for corn and soybeans topped out at nearly $8 per bushel and more than $16 per bushel this summer, respectively.

Many producers re-invested profits into land, contributing to the recent run-up. Land prices increased 22 percent last year. They've almost doubled since 2003.

Cash corn at the East Central Iowa Cooperative in La Porte City closed Monday at $3.45 per bushel and soybeans closed at $7.95 per bushel. With commodity prices slashed in half in less than six months and inputs for next year's crop - seed, fertilizer, herbicides and pesticides - not following suit, farmers say they will be cautious.

"It isn't going to cash flow. It will stop guys from buying unless they have a lot of equity," said Jim Grady, a rural Waterloo farmer. "The farm economy is still better than the '80s. I think it will start leveling off."

Bruce Clark, vice president of commercial and ag lending for Liberty Bank in Waterloo, said the local land market is already suffering.

According to the survey, which looked at values as of Nov. 1, Black Hawk County farmland is worth an average $5,818 per acre this year. That's $735 more than 2007.

During a recent land auction, Clark said 143 acres near Dunkerton could only muster $4,200 per acre. He said 125 is tillable with a corn suitability rating of 79.6, which is considered productive.

"The consensus after the auction was it would have gone higher a few months ago. You don't find as many eager buyers," Clark said.

East central Iowa reported a significant decrease in the amount of sales activity this year, the survey indicated. Duffy said it's a reflection of flooding and other hardships.

Cash flow concerns are also a primary reason. Duffy said break-even prices next year range from $4.50 to more than $5 per bushel for corn and about $10 for soybeans if producers make rent or land payments.

These figures far exceed current cash prices.

"The outlook next year is not positive with cost of inputs and commodity prices. We're being a little more cautious," said Alan Karkosh, a rural Waterloo farmer.

Even with future grain profitability in question, Duffy doesn't expect a re-run of the '80s. He said several factors work in farmers' favor today.

About 75 percent of Iowa's farmland now is debt-free, he said. And those that purchased ground recently didn't take out large loans to do it. Duffy said that wasn't the case two decades ago.

In the late 1970s, a lot of land was purchased under contract, Duffy said. When the economy went south, many farmers abandoned the land furthering the free-fall. On the bright side, Duffy said the renewable fuels mandate will help support corn and soybean prices, which wasn't the case years ago.

"I wouldn't be pessimistic, just realistic," Duffy said of future land deals. "Be cautious about taking on a lot of debt to buy land. The income potential may not be there for the next couple of years."

Contact Matthew Wilde at (319) 291-1579 or matt.wilde@wcfcourier.com.