February 2018 Wallace’s Farmer “MarketPlace Extra”
The highest quality farms, from a production standpoint, (e.g., highly productive soils, solid fertility and drainage and high ‘farm-ability’) continue to outperform those farms with poorer soils, waterways or other obstructions. On a statewide basis, there continues to be 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 for commercial or residential development in more urban areas. The investor-level interest provides an additional layer of market depth and stability. Finally, interest rates remain very low, which also creates a layer of support in the Iowa farmland market. Overall, there are many supportive factors to the current farmland marketplace.
Likewise, there are also factors that seem to be pressuring farmland values. Low commodity prices and several consecutive years of somewhat weak on-farm profitability continue to keep a lid on land values. Additionally, in areas that have seen an increase in recent land sales activity, the use of available local capital to buy more land has created the potential for price weakness in that immediate area. Pay close attention to neighborhoods where several sales are occurring, and understand that this may be a marker for potential farmland price weakness on other upcoming sales in that area. For landowners concerned about farmland values dropping in the future, now may be a logical time to consider selling.
73 +/- acres, located south of Archer, recently sold at public auction for $12,800 per acre. The farm consisted of 69 +/- tillable acres with a CSR2 of 97.3 on primary soil types of Galva, Primghar, and Afton. The property was sold subject to a one-year cash rent lease for the 2018 crop year, with the Buyer to receive $400 per tillable acre for the 2018 crop year.
78 +/- acres, located in Fremont Township, sold for $8,100 per acre. The parcel consisted of 76.5 crop acres with an average CSR2 of 74.3. The sale equaled $111 per CSR2 point on the crop acres.
Black Hawk County:
68 +/- acres, located southeast of Hudson, recently sold at public auction for $11,300 per acre. The farm was 100% tillable cropland and featured a CSR2 of 92.1. The buyer was a local farmer.
151 +/- acres, located in Douglas Township, sold for $7,000 per acre. The parcel consisted of 148 +/- tillable cropland acres with an average CSR2 of 74.4. The sale equaled $96 per CSR2 point on the crop acres.
154 +/- acres, located in German Township, sold for $9,600 per acre. The parcel consisted of 150 +/- tillable cropland acres with an average CSR2 of 91.4. The sale equaled $108 per CSR2 point on the crop acres.
145 +/- acres, located south of Mechanicsville, recently sold at public auction for $10,200 per acre. The farm consisted of 139 +/- tillable cropland acres with an average CSR2 of 91.4. The sale equaled $116 per CSR2 point on the crop acres.
99 +/- acres, located northeast of Bedford, recently sold at public auction for $3,000 per acre. The farm consisted of 76 +/- tillable acres with a CSR2 of 54.2, of which 51 +/- acres were in cropland and 25 +/- acres were in CRP paying $178/enrolled acre. 23 +/- acres of this farm were non-cropland.
81 +/- acres, located east of Chariton, recently sold at public auction for $3,000 per acre. The farm consisted of 73 +/- tillable cropland acres currently in hay with the balance in timber.
85 +/- acres, near Wever, sold for $4,076 per acre. The farm had 81 +/- tillable cropland acres with an average CSR2 of 56.2 with sandier soil types. The sale equaled $76 per 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.