April 2019 Wallace’s Farmer “MarketPlace Extra”

Spring has finally arrived in Iowa, and with it, optimism for 2019. The Iowa farmland market in early 2019 has held up its end of the bargain, with continued resilience and stability. Value differences continue to exist from neighborhood to neighborhood and are most often influenced by the level of crop production success (or struggle) across recent crop years. High-quality farms continue to sell best. Above-average soil types, adequate/good drainage, easy farm-ability, and well-managed fertility levels tend to be major value influences. Farmers are still buying the majority of farms offered to the market, although non-farming investors represent an important segment of buyers in most corners of the Iowa market.

Several value drivers will continue to influence land sales, as the growing season approaches. First, the early success (or struggle) of the 2019 growing season will play an important role in current and upcoming land sales. Next, keep an eye on the level and direction of interest rates. Any meaningful increase in long-term rates during 2019 will add pressure to farmland values. Many were expecting the Federal Reserve to again raise short-term rates at least twice in 2019, which would be a continuation of a pattern from the past two years (albeit at a slightly slower pace). However, these rate increases have been put into question with recent comments from several governors of the regional Fed banks, so stay tuned as interest rate policy continues to evolve. Third, commodity markets are a major influencer in actual farm profitability, as well as the collective confidence/psyche of the Midwestern land market. The results (or lack thereof) coming from global trade negotiations, particularly with China, will continue to impact commodity prices and underlying asset values, including farmland. So, as we get into the growing season, keep an eye on both the level and direction of commodity prices. There are sure to be other market-driving factors to emerge in 2019, so stay tuned for further analysis as new information surfaces on these, and other, topics.

NORTHWEST

Lyon County:

80 +/- acres, located northwest of Rock Valley, recently sold at public auction for $13,900 per acre. The farm consisted of 79 +/- tillable acres with a CSR2 of 74.4, and equaled $189/CSR2 point on the tillable acres. Also of note, this farm has had cattle manure applied annually, along with lime being applied in the fall of 2017. 5-year corn APH of 209.4.

NORTH CENTRAL

Mitchell County:

73 +/- acres, located near New Haven, recently sold at public auction for $7,200 per acre. The farm consisted of 69 +/- tillable acres with a CSR2 of 69.4, and equaled $110/CSR2 point on the tillable acres.

NORTHEAST

Black Hawk County:

66 +/- acres, located east of Dunkerton, recently sold at public auction for $5,100 per acre. The farm consisted of 65 +/- tillable acres with a CSR2 of 65.3. Of the 65 +/- tillable acres, there were more than 20 acres enrolled in CRP, making this farm a mixture of CRP and cropland. The sale equaled $79/CSR2 point on the tillable acres.

WEST CENTRAL

Sac County:

80 +/- acres, located southwest of Wall Lake, recently sold at public auction for $5,250 per acre. The farm consisted of 63 +/- tillable acres with a CSR2 of 65.8, with the balance of the land being pasture. The sale equaled $101/CSR2 point on the tillable acres.

CENTRAL

Poweshiek County:

80 +/- acres, located east of Montezuma, recently sold at public auction for $11,300 per acre. The farm consisted of 81 +/- tillable acres with a CSR2 of 82.2. The sale equaled $136/CSR2 point on the tillable acres.

EAST CENTRAL

Cedar County:

40 +/- acres, located near Tipton, recently sold for $11,500 per acre. The farm consisted of 39 +/- tillable acres with a CSR2 of 93.8. The sale equaled $125/CSR2 point on the tillable acres.

SOUTHWEST

Fremont County:

154 +/- acres, located west of Shenandoah, recently sold at public auction for $6,700 per acre. The farm consisted of 142 +/- tillable acres with a CSR2 of 75.9. The sale included 3 grain bins and a machine shed, and the farm was under lease for the 2019 crop year, with the buyer receiving the landlord’s share of the 2019 income. The sale equaled $96/CSR2 point on the tillable acres.

SOUTH CENTRAL

Monroe County:                                                                           

77 +/- acres, located north of Melrose, recently sold for $3,160 per acre. The farm consisted of 64 +/- tillable acres with a CSR2 of 48.5, with the balance of land being in timber/draws. The sale equaled $78/CSR2 point on the tillable acres.

SOUTHEAST

Keokuk County:

80 +/- acres, located north of Keota, recently sold at public auction for $12,700 per acre. The farm consisted of 79 +/- tillable acres with a CSR2 of 86.6. The sale equaled $149/CSR2 point on the tillable acres.

Hertz Real Estate Services compiled this list, but not all sales were handled by Hertz. Call Hertz at 515-382-1500/800-593-5263 or visit www.Hertz.ag.