February 2021 Wallace’s Farmer “MarketPlace Extra”

Sale results over recent months in the Iowa (and Midwestern) farmland market have turned a lot of heads. Almost across the board, we have observed stronger land prices than anyone would have anticipated 6 months ago. And while the December release of the annual Iowa State Land Values release reflected a 1.7% increase in average land values, if you go into any coffee-shop across Iowa, I think you will hear discussion of a market that “feels” stronger than 1.7%.

No question, we entered the new year with mostly positive signs for farmland owners. Commodity prices hit multi-year highs, driven in part on huge export demand. The improved profit picture has given land market participants an increasing confidence in the future. Interest rates remained incredibly low, relative to historical standards, which has motivated many buyers to bid more aggressively for available land. Then, in late December, President Trump signed the bill ratifying the third tranche of COVID-related support from the federal government to the U.S. economy, which included another CFAP payment to farm producers, thereby injecting additional liquidity into the countryside. No individual government payment has been life-changing; but when tallied together, the dollars look more significant.  And finally, there are few farms publicly available for sale, which has created a scenario resembling pent-up demand in many neighborhoods.  

It is somewhat common to look at the farmland market and see a couple positive factors and a couple negative factors, thereby signaling stability. It is less common to see most – if not all – signs point towards the positive, like the major drivers do here in early 2021. This has created an opportunity for anyone who is considering a farm sale. However, when (not if!) the tide turns on one or more of these major factors, the market can and will adjust. In the meantime, watch the main market drivers, particularly commodity prices, interest rates, and overall land sales volume, as these factors seem to impact sale results most significantly in today’s market. But so long as these drivers stay positive, land sales will probably continue to turn heads, just like some of the sales noted below.

NORTHWEST

Dickinson County:

120 +/- acres, located northwest of Terril, recently sold at a virtual online auction for $10,350 per acre. The farm consisted of 107 +/- tillable acres with a CSR2 of 85.5, and equaled $136/CSR2 point on the tillable acres. Note: The non-tillable property included a minor creek, a grass waterway, and a small timber acreage.

NORTH CENTRAL

Cerro Gordo County:

130 +/- acres, located near Dougherty, recently sold at public auction for $7,600 per acre. The farm consisted of 121 +/- tillable acres with a CSR2 of 79.3, and equaled $103/CSR2 point on the tillable acres.

NORTHEAST

Buchanan County:

75 +/- acres, located west of Lamont, recently sold at public auction for $9,378 per acre. The farm consisted of 67 +/- tillable acres with a CSR2 of 84.6, and equaled $124/CSR2 point on the tillable acres.

WEST CENTRAL

Calhoun County:

80 +/- acres, located north of Lohrville, recently sold at public auction for $9,900 per acre. The farm consisted of 76 +/- tillable acres with a CSR2 of 83.3, and equaled $125/CSR2 point on the tillable acres.

CENTRAL

Poweshiek County:

40 +/- acres, located south of Deep River, recently sold at public auction for $6,950 per acre. The farm consisted of 34 +/- tillable acres with a CSR2 of 62.5, and equaled $131/CSR2 point on the tillable acres. Note: This land featured 4 +/- acres of grass waterways.

EAST CENTRAL

Johnson County:

78 +/- acres, located north of Lone Tree, recently sold for $10,950 per acre. The farm consisted of 78 +/- tillable acres with a CSR2 of 88.2, and equaled $124/CSR2 point on the tillable acres.

SOUTHWEST

Adams County:

210 +/- acres, located west of Creston, recently sold for $5,800 per acre. The farm consisted of 204 +/- tillable acres with a CSR2 of 55.9, and equaled $107/CSR2 point on the tillable acres.

SOUTH CENTRAL

Madison County:                                                                         

60 +/- acres, located south of Winterset, recently sold for $8,500 per acre. The farm consisted of 57 +/- tillable acres with a CSR2 of 83.8, and equaled $107/CSR2 point on the tillable acres.

SOUTHEAST

Washington County:

66 +/- acres, located northeast of Washington, recently sold at a virtual online auction for $10,000 per acre. The farm consisted of 65 +/- tillable acres, with a CSR2 of 80.0, and equaled $127/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.