July 2024 Wallace’s Farmer MarketPlace Extra

The Latest on Land Values

Since January, it has been easy to find commentary that describes the down shift occurring in agriculture – very tight margins in 2024 with the reality of near breakeven commodity prices, still elevated input prices, and a much higher interest rate environment compared to recent years. Plus, we’ve just endured an extended/tough planting season. With such a difficult outlook, you’d expect to see falling land values, right?

Not quite. Despite entering the growing season with a very thin profit forecast, land values thus far have mostly held steady. Strong profits from 2021 – 2023 continue to support purchase decisions, even if made reluctantly. Farmers have clearly become more discriminating, with most trying to protect working capital. But when the neighboring farm comes up, what do you do? Some investor money has exited the farmland market – after all, widespread 5% money market returns look attractive when compared to 2 to 3% rental income returns in farmland – but here too, there are still investors looking for farms. So, while overall demand may be down slightly, there’s still demand for farm acquisitions.

On the other side of the ledger is the supply of farms for sale. And this is where I believe the land market has shifted most. It seems there are/have been considerably fewer farms for sale in the first half of 2024 than during the same periods in 2021 – 2023. Thus, land prices have been sticky, as there’s still been adequate demand to absorb the reduced supply. As 2024 continues to play out, this balance will be worth watching. I suspect there will likely be some imbalances that bubble to the surface, as the market becomes increasingly localized.

NORTHWEST

Palo Alto County:

38 +/- acres, located northeast of Ruthven, recently sold at public auction for $13,400 per acre. The farm consisted of 35 +/- tillable acres with a CSR2 of 83.6, and equaled $174/CSR2 point on the tillable acres.

NORTH CENTRAL

Floyd County:

97 +/- acres, located near Charles City, recently sold for $7,622 per acre. The farm consisted of 89 +/- tillable acres with a CSR2 of 64.5, and equaled $129/CSR2 point on the tillable acres.

NORTHEAST

Chickasaw County:

64 +/- acres, located northeast of Lawler, recently sold for $9,252 per acre. The farm consisted of 64 +/- tillable acres with a CSR2 of 58.2, and equaled $159/CSR2 point on the tillable acres.

WEST CENTRAL

Harrison County:

77 +/- acres, located east of Beebeetown, recently sold at public auction for $14,800 per acre. The farm consisted of 77 +/- tillable acres with a CSR2 of 68.8, and equaled $215/CSR2 point on the tillable acres. Note: This farm was under lease for 2024, with the buyer receiving the $245/tillable acre cash rent.

CENTRAL

Grundy County:

83 +/- acres, located west of Reinbeck, recently sold for $14,549 per acre. The farm consisted of 79 +/- tillable acres with a CSR2 of 89.7, and equaled $170/CSR2 point on the tillable acres.

EAST CENTRAL

Johnson County:

106 +/- acres, located east of Iowa City, recently sold for $11,675 per acre. The farm consisted of 107 +/- tillable acres with a CSR2 of 70.0, and equaled $165/CSR2 point on the tillable acres.

SOUTHWEST

Taylor County:

72 +/- acres, located south of Corning, recently sold at public auction for $7,300 per acre. The farm consisted of 59 +/- CRP acres, with a CSR2 of 67.5, and equaled $132/CSR2 point on the CRP acres. Note: The CRP contract payment is $239/acre and expires in 2027.

SOUTH CENTRAL

Madison County:

160 +/- acres, located north of Winterset, recently sold at public auction for $10,300 per acre. The farm consisted of 148 +/- tillable acres with a CSR2 of 71.2, and equaled $156/CSR2 point on the tillable acres.

SOUTHEAST

Keokuk County:

97 +/- acres, located north of What Cheer, recently sold at public auction for $13,100 per acre. The farm consisted of 97 +/- tillable acres with a CSR2 of 73.9, and equaled $177/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. 

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