April 2020 Wallace’s Farmer “MarketPlace Extra”

Well, it has officially started again! We are seeing noticeably “longer” days, and warmer temperatures are becoming more frequent, as we enjoy the annual transition from winter to spring. This time each year is regularly one of the most hopeful for people, and folks all around seem to have just a little different bounce in their step. Across the countryside, it won’t be long before planters are crisscrossing Iowa farm fields!

The early months of 2020 have been interesting, to say the least. On the encouraging side of the ledger are seemingly calmer waters on the trade front. Increasing the demand base and market penetration for our crops is a big deal for Midwestern agriculture. Having said that, on the flip side of the ledger are worries related to the global spread of the Coronavirus, which is causing real concern for demand destruction in commodities and a general slowdown in the global economy. People are legitimately fearful of this unknown virus because of the death toll that has followed the spread of the virus. And, uncertainty is the word of the day as it relates to U.S. presidential politics in this major election year. How might any number of policies change post- election? There’s a lot to think about this year, and we’re only at the quarter-pole!

The late-winter farmland market has continued to show resilience and strength in most areas. A large volume of farmland sales occurred in the final 90 days of 2019, and the market absorbed the volume spike at fair market prices without much trouble. The first couple months of 2020 have seen a slowdown in overall sales volume, with steady to stronger land values in most locales. Given the recent heightened uncertainty and skittishness in the equity markets, long-term interest rates have again moved lower in a meaningful way. In fact, long-term mortgage rates are back at or near all-time lows, with the Federal Reserve again talking about further rate cuts. As has been mentioned in this column many times in the past, low long-term interest rates support stronger farmland prices. And, I haven’t even mentioned that farmland, as an asset class, looks favorable when the Dow is in freefall mode. So, compared to many (or most) of the alternatives, farmland continues to push runs across the plate for long-term owners. The sales that follow reflect the relative stability in the farmland market across Iowa.

NORTHWEST

Lyon County:

89 +/- acres, located northwest of Rock Valley, recently sold at public auction for $11,500 per acre. The farm consisted of 83 +/- tillable acres with a CSR2 of 73.3, and equaled $168/CSR2 point on the tillable acres.

NORTH CENTRAL

Butler County:

134 +/- acres, located near Dumont, recently sold at public auction for $11,100 per acre. The farm consisted of 131 +/- tillable acres with a CSR2 of 91.2, and equaled $124/CSR2 point on the tillable acres.

NORTHEAST

Bremer County:

188 +/- acres, located west of Readlyn, recently sold for $8,800 per acre. The farm consisted of 183 +/- tillable acres with a CSR2 of 83.2, and equaled $109/CSR2 point on the tillable acres.

WEST CENTRAL

Calhoun County:

77 +/- acres, located east of Rockwell City, recently sold at public auction for $9,100 per acre. The farm consisted of 76 +/- tillable acres with a CSR2 of 85.9, and equaled $107/CSR2 point on the tillable acres.

CENTRAL

Marshall County:

72 +/- acres, located east of Liscomb, recently sold at public auction for $10,600 per acre. The farm consisted of 71 +/- tillable acres with a CSR2 of 96.2, and equaled $112/CSR2 point on the tillable acres.

EAST CENTRAL

Linn County:

240 +/- acres, located east of Urbana, recently sold for $7,000 per acre. The farm consisted of 197 +/- tillable acres with a CSR2 of 76.2, and equaled $112/CSR2 point on the tillable acres. Note: The balance of the farm was made of timber pockets.

SOUTHWEST

Mills County:

240 +/- acres, located north of Malvern, recently sold at public auction for $6,000 per acre. The farm consisted of 206 +/- tillable acres with a CSR2 of 74.3, and equaled $94/CSR2 point on the tillable acres. Note: The balance of the farm was made of timber pockets.

SOUTH CENTRAL

Madison County:                                                                                 

40 +/- acres, located south of Earlham, recently sold for $8,000 per acre. The farm consisted of 39 +/- tillable acres with a CSR2 of 85.2, and equaled $96/CSR2 point on the tillable acres.

SOUTHEAST

Louisa County:

67 +/- acres, located south of Lone Tree, recently sold at public auction for $9,700 per acre. The farm consisted of 62 +/- tillable acres with a CSR2 of 75.7, and equaled $138/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.