March 2019 Wallace’s Farmer “MarketPlace Extra”

The early 2019 Iowa farmland market continues its overall resilience and stability.  As previously reported, value differences do exist from neighborhood to neighborhood.  However, these differences seem to be most pronounced in those areas where either strong crop yields have occurred (e.g., market being stronger) or poor crop yields have occurred (e.g., market being weaker).  Regardless of the area, 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 continue to pursue acquisitions when they make strategic sense to the core operation of their farming business.  Likewise, non-farming investors remain active in most corners of the Iowa market.

Looking forward to the fast-approaching 2019 crop year, several marketplace drivers will continue to influence land sales.  First, crop production from recent years still plays an important role in current land sales – typically, the more bushels grown in an area, the more competitive most land sales in that area prove to be.  Add to that, during this time of year, that people are closely watching to see how early season field operations are progressing.  Next, keep an eye on the level and direction of interest rates.  Any meaningfully increase in long-term rates during 2019 will add pressure to farmland values.  Many are 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 2 years (albeit a slightly slower pace).  Short-term rates don’t directly impact long-term borrowing costs, but short-term rates do impact farm operating notes, thus increasing the cost structure for current farm operations.  Third, commodity markets are a major influencer in actual farm profitability, as well as the collective confidence/psyche of the Midwestern land market.  As previously stated in this column, the result of how global trade negotiations play out in the weeks and months ahead will continue to impact commodity prices and underlying asset values, including farmland.  Lastly, keep in mind that February was an important month for determining crop insurance price levels for 2019 crop production.  So, keep an eye on both the level and direction of commodity prices between now and spring planting – and stay tuned for further analysis as new information surfaces on all these topics.

NORTHWEST

Lyon County:

80 +/- acres, located northeast of Rock Rapids, recently sold at public auction for $12,200 per acre. The farm consisted of 78 +/- tillable acres with a CSR2 of 88.5, and equaled $141/CSR2 point on the tillable acres.

NORTH CENTRAL

Butler County:

77 +/- acres, located near Greene, recently sold at public auction for $7,800 per acre. The farm consisted of 74 +/- tillable acres with a CSR2 of 87.9, and equaled $92/CSR2 point on the tillable acres.

NORTHEAST

Fayette County:

80 +/- acres, located southeast of Fayette, recently sold at public auction for $8,700 per acre. The farm consisted of 79 +/- tillable acres with a CSR2 of 87.5, and equaled $101/CSR2 point on the tillable acres.

WEST CENTRAL

Calhoun County:

80 +/- acres, located north of Rinard, recently sold at public auction for $9,500 per acre. The farm consisted of 77 +/- tillable acres with a CSR2 of 83. The sale equaled $118/CSR2 point on the tillable acres.

CENTRAL

Boone County:

40 +/- acres, located northeast of Boone, recently sold at public auction for $8,950 per acre.  The farm consisted of 38 +/- tillable acres with a CSR2 of 82.4.  The sale equaled $114/CSR2 point on the tillable acres.

EAST CENTRAL

Clinton County:

116 +/- acres, located north of Calamus, recently sold at public auction for $10,600 per acre.  The farm consisted of 115 +/- tillable acres with a CSR2 of 84.6.  The sale equaled $126/CSR2 point on the tillable acres. 

SOUTHWEST

Cass County:

221 +/- acres, located south of Massena, recently sold at public auction for $3,400 per acre.  The farm consisted of 184 +/- tillable acres with a CSR2 of 55.1. The sale equaled $74/CSR2 point on the tillable acres.

SOUTH CENTRAL

Warren County:                                                                            

66 +/- acres, located south of St. Marys, recently sold for $3,685 per acre.  The farm consisted of 38 +/- tillable acres with a CSR2 of 58.3, with the balance of land being timber and a creek.  

SOUTHEAST

Wapello County:

140 +/- acres, located east of Ottumwa, recently sold at public auction for $2,550 per acre.  The farm consisted of 66 +/- tillable acres with a CSR2 of 58.3.  All the tillable land was enrolled in CRP through September of 2020.  The balance of the land was timber and wooded draws.

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.