December 2017 Wallace’s Farmer “MarketPlace Extra”
Throughout the State of Iowa, impressive corn and soybean yields pleasantly surprised many market observers who were expecting smaller yield totals due to the lack of regular and wide-spread summer rainfall. However, early fall land sales appeared to confirm the September data release of the Iowa REALTORS® Land Institute farmland value survey, which reported land values increasing 2.0% since March 2017. The stability and strength in the marketplace is varied, however. Differences from neighborhood to neighborhood (or sale to sale) can be seen, and the strongest land values continue to be seen in the sale of top-quality farms with highly productive soils, solid fertility and drainage, and high ‘farm-ability’ (e.g., large and square fields, few point rows, waterways/creeks/obstructions, etc.).
Both local and non-local investor interest in farmland continues to be seen, and this interest is providing an additional layer of market depth and stability. Interest rates remain very low, and given the lack of attractive investment alternatives, non-farming investors continue to hold a general belief that farmland is a strong tangible asset and sound overall investment. All that said, low commodity prices and somewhat weak on-farm profitability continue to keep a lid on land values. And, in locales with multiple recent land sales, the use of available capital to buy more land has created the potential for localized price weakness. Keep an eye on local areas where several sales are happening, and understand that this may be a marker for potential land price weakness on other upcoming sales in that area. For owners concerned about farmland values dropping in the future, now may be a logical time to consider selling, as now is the heart of the traditional farmland “sales season” (e.g., September to March).
237 +/- acres, located west of Royal, recently sold at public auction. Parcel 1 consisted of 80 +/- acres with a CSR2 of 97.4, and sold for $11,100/acre. Parcel 2 consisted of 78 +/- acres with a CSR2 of 96.9, and sold for $12,000/acre. Parcel 3 consisted of 79 +/- acres with a CSR2 of 97.4, and sold for $11,100/acre.
169 +/- acres, located outside of Floyd, recently sold at public auction. Parcel 1 consisted of 73 +/- acres with a CSR2 of 83.2, and sold for $8,650 per acre, or $108 per CSR2 point on the crop acres. Parcel 2 consisted of 96 +/- acres with a CSR2 of 71.2, and sold for $6,000 per acre, or $91 per CSR2 point on the crop acres.
148 +/- acres, located north of Hawkeye, sold for $6,158 per acre. The farm had a CSR2 of 84.5 on 134.6 cropland acres. The Seller was a family trust, and the Buyer was a local investor.
399 +/- acres, located in Kendrick Township sold in two parcels. Parcel 1 consisted of 166 +/- acres and sold for $4,500 per acre. Parcel 1 featured 84.8 crop acres with an average CSR2 of 66.0which equated to $134 per CSR2 point on the crop acres. Parcel 2 consisted of 233 +/- acres and sold for $9,000 per acre. Parcel 2 featured 212.5 crop acres with an average CSR2 of 86.0.This sale equaled $115 per CSR2 point on the crop acres.
160 +/- acres, located in Deep River Township, sold for $4,450 per acre. The parcel consisted of 74.2 crop acres with an average CSR2 of 69.5. The parcel also included 22.5 CRP acres. The sale equaled $138 per CSR2 point on the crop acres.
149 +/- acres, located 2 miles east of Martelle, recently sold in 2 parcels at public auction. Parcel 1 consisted of 111 +/- acres, of which 103.1 acres were cropland with a CSR2 of 84.6. Parcel 1 sold for $8,800/acre to a local farmer. Parcel 2 consisted of 38 +/- acres, of which 36.8 acres were cropland with a CSR2 of 89.9. Parcel 2 sold for $10,000 per acre and sold to a local investor. The Seller was an estate.
125 +/- acres, sold for $4,815 per acre. The farm had 114.9 cropland acres with an average CSR2 of 38.4 (the old CSR rating was 62.1). The sale equaled nearly $136/CSR2 point per crop acre, or $5,221 per cropland acre.
40 +/- acres, west of Winterset, recently sold at public auction for $2,850 per acre. The farm consisted of 29.4 cropland acres with an average CSR2 of 41.9, and the balance of the farm was in timber and a creek.
33 +/- acres, north of Fairfield, sold at public auction for $6,200 per acre. The farm had 29.2 +/- cropland acres with an average CSR2 of 70.3. The sale equaled $100 per CSR2 point per crop acre, or $7,007 per tillable acre.
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.