December 2019 Wallace’s Farmer “MarketPlace Extra”
As we close out 2019, I’ve got good news to report… 2019 is almost over! When I’ve asked people if they are sorry to see 2019 end, the answer is most often a resounding “No”. There are some years that folks are just happy to put behind them, and 2019 is one of them. A slow and late fall harvest has represented a microcosm of the entire year. Delayed crop planting in the spring, followed by a somewhat mild summer in which crops were slow to mature, positioned the late harvest start. Then, regular rains early in harvest delayed normal late-September and October harvest progress. Not to be outdone, legit snow in late October across the Corn Belt further complicated things. It’s been a tough year, and for many, it’s not quite over yet.
While the short-term struggle of 2019 has been real for many, I’ve continued to be impressed by the long-term lens that farmland buyers use to view potential land purchases. Land is not an asset that causes current or prospective owners to become overly rattled by the struggle of a single year. People who own land understand that some years will be more difficult/fun/successful – insert your preferred description– than others. That’s just part of land ownership and production agriculture in general. And when a tough year shows itself, most folks find a way to absorb the blow and look toward the horizon of a more promising year. Strangely, some years will be very difficult, yet still quite successful. And that’s somewhat how I view 2019 for a large part of the State of Iowa. It certainly hasn’t been easy, and the results haven’t been perfect. But, by and large, we’ve had a successful growing season with respectable outcomes. And that’s what is supporting the farmland sales environment across the region.
More broadly, our current interest rate environment is also supporting current land sales in a meaningful way. A year ago, the Federal Reserve had been steadily increasing short-term rates, and those higher short-term rates had influenced longer-term rates to creep higher in the 2nd half of 2018. Anyone borrowing money was feeling the impact of higher rates. The tone has changed in 2019 with a policy reversal from the Fed, with 3 short-term rate cuts – the most recent in October – and long-term rates have settled back to near record low rates. This has been very supportive to farmer-buyers and investor-buyers alike, and the land market in general.
In conclusion, we will probably talk about 2019 for many years to come. From spring flooding to fall blizzards, this year has left its mark. Despite the struggles, those involved in Iowa agriculture have persisted, and our farmland markets have continued to reflect strong resiliency.
NORTHWEST
Sioux County:
67 +/- acres, located east of Sioux Center, recently sold at public auction for $18,300 per acre. The farm consisted of 62 +/- tillable acres with a CSR2 of 94.6, and equaled $209/CSR2 point on the tillable acres.
NORTH CENTRAL
Cerro Gordo County:
156 +/- acres, located near Burchinal, recently sold at public auction for $8,800 per acre. The farm consisted of 150 +/- tillable acres with a CSR2 of 83.6, and equaled $109/CSR2 point on the tillable acres.
NORTHEAST
Clayton County:
39 +/- acres, located northwest of Volga, recently sold for $4,075 per acre. The farm consisted of 36 +/- tillable acres with a CSR2 of 39.6, and equaled $111/CSR2 point on the tillable acres.
WEST CENTRAL
Crawford County:
75 +/- acres, located south of Schleswig, recently sold at public auction for $7,400 per acre. The farm consisted of 77 +/- tillable acres with a CSR2 of 62.2, and equaled $116/CSR2 point on the tillable acres.
CENTRAL
Story County:
132 +/- acres, located east of Cambridge, recently sold at public auction for $10,200 per acre. The farm consisted of 130 +/- tillable acres with a CSR2 of 86.4, and equaled $120/CSR2 point on the tillable acres.
EAST CENTRAL
Johnson County:
104 +/- acres, located northeast of Iowa City, recently sold for $8,800 per acre. The farm consisted of 98 +/- tillable acres with a CSR2 of 88.6, and equaled $105/CSR2 point on the tillable acres.
SOUTHWEST
Page County:
206 +/- acres, located northeast of Clarinda, recently sold at public auction for $9,550 per acre. The farm consisted of 189 +/- tillable acres with a CSR2 of 82.1, and equaled $127/CSR2 point on the tillable acres. This farm also included 2 modern 20,000-bushel grain bins that were built in 2013 and 2014, respectively.
SOUTH CENTRAL
Madison County:
107 +/- acres, located northwest of Truro, recently sold for $5,374 per acre. The farm consisted of 82 +/- tillable acres with a CSR2 of 83.1, with the balance of land in timber and a creek. The sale equaled $84/CSR2 point on the tillable acres.
SOUTHEAST
Wapello County:
77 +/- acres, located south of Ottumwa, recently sold at public auction for $5,600 per acre. The farm consisted of 77 +/- tillable acres with a CSR2 of 58.1, and equaled $96/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.
