March 2018 Wallace’s Farmer “MarketPlace Extra”
Many factors influence local values including the number of recent land sales, the influence of local livestock production, and recent crop production results. The highest quality farms from a production standpoint (e.g., highly productive soils, solid fertility and drainage, and high ‘farm-ability’) continue to out-perform those farms with poorer soils, waterways or other obstructions. Across Iowa, there is also interest in farmland from both local and non-local investors; some of these investors are seeking diversification for their overall investment portfolios, while others are seeking to complete 1031 tax-deferred exchanges after having sold land in more urban areas. The investor-level interest in buying land provides additional market depth and stability, on top of the more typical interest from local farmers. Finally, even though there is growing expectation that interest rates will be moving higher in 2018, long-term borrowing rates remain very low, and this fact is supportive to the current farmland market.
While there are several supportive influences on the current farmland market, there are also offsetting influences that are pressuring farmland values. Primarily, low commodity prices, and several consecutive years of weak on-farm profitability, continue to keep a lid on land values. In addition, some local areas (or counties) have seen a spike in the number of sales in that area, which has drawn significant local capital out of the local market. Pay close attention to neighborhoods where several sales have occurred, and understand that this may be a marker for potential farmland price weakness on other upcoming sales in that area. Finally, thin profits for some farming operations may be creating an environment where farmers need to liquidate a farm (or other assets) to secure operating capital; if this begins to occur on a wide-spread basis, the farmland market may see increasing price pressure. For landowners concerned about farmland values dropping in the future, now may be a logical time to consider selling.
NORTHWEST
Lyon County:
82 +/- acres, located southeast of Rock Rapids, recently sold at public auction for $12,250 per acre. The farm consisted of 80 +/- tillable acres with a CSR2 of 92.5 on primary soil types of Galva, Colo, Primghar and Marcus. The sale equaled $135/CSR2 point on the crop acres.
NORTH CENTRAL
Butler County:
272 +/- acres, located southwest of Greene, sold at public auction for $8,600 per acre. The farm consisted of 264 +/- tillable acres with a CSR2 of 83.2. The sale equaled $106/CSR2 point on the crop acres.
NORTHEAST
Black Hawk County:
73 +/- acres, located south of Waterloo, recently sold at public auction for $12,353 per acre. The farm consisted of 72 +/- tillable acres with a CSR2 of 90.5. The buyer was a local farmer and the sale equaled $138/CSR2 point on the crop acres.
WEST CENTRAL
Greene County:
100 +/- acres, located in Junction Township, sold for $9,000 per acre. The parcel consisted of 97.5 +/- tillable acres with an average CSR2 of 83.8. The sale equaled $110/CSR2 point on the crop acres.
CENTRAL
Hamilton County:
160 +/- acres, located in Liberty Township, sold for $9,650 per acre. The farm consisted of 156 +/- tillable acres with an average CSR2 of 77.4. The sale equaled $128/CSR2 point on the crop acres.
EAST CENTRAL
Benton County:
129 +/- acres, located west of Garrison, sold at public auction for $9,600 per acre. The farm consisted of 123 +/- tillable acres with an average CSR2 of 88. The sale equaled $114/CSR2 point on the crop acres.
SOUTHWEST
Monona County:
139 +/- acres, located near Blencoe, sold at public auction for $6,000 per acre. The farm consisted of 137 +/- tillable acres with a CSR2 of 70.4. The sale equaled $86/CSR2 point on the crop acres.
SOUTH CENTRAL
Madison County:
40 +/- acres, located north of Patterson, sold for $5,500 per acre. The farm consisted of 31 +/- tillable acres with a CSR2 of 61, with the balance of acres in timbered draws. The sale equaled $116/CSR2 point on the crop acres.
SOUTHEAST
Keokuk County:
104 +/- acres, located near South English, sold at public auction for $9,300 per acre. The farm had 104 +/- tillable acres with an average CSR2 of 72.6. The sale equaled $128/CSR2 point on the crop 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.
