by Jared Augustine

The past month has been relatively quiet for farm sales, which is normal for this time of year as most farms are rented for the current crop year. We were able to sneak in a couple sales in the past few weeks that allowed early buyer possession to let operators farm the property this year.

The land market overall has been steady. However, an argument could be made that we have seen a 5% decrease in value in some areas since last fall. Other areas are still performing surprisingly well. We just put a farm under contract on a “one-chance, sealed-bid sale” in Meeker County that sold for more than we anticipated.

At this point, I expect to continue to see strong sales for quality farms, but it will all depend on the buyers in each sale, and how aggressive they can afford to be with corn selling for $4.50.

Soil quality

In Minnesota, soil quality is rated by the Crop Productivity Index. A CPI score above 90 (out of 100) is usually considered high-quality and more valuable, although there are still plenty of good-producing farms that have a CPI in the 80s.

Where I live in southeast Blue Earth County, there are many high-producing farms with CPIs of 84 to 89. Color-coded maps are produced from soil samples, and all the soil types present on the farm are weighted by their CPI score and the percent of the area they cover.

For example, Normania Loam scores 99, while an Okoboji Silty Clay Loam scores an 86. If 50% of the soil present on the farm is Normania, and the other 50% is Okoboji, the farm has a CPI of 92.5.

Every now and then we get questions on soil quality and CPI. People sometimes ask whether there is anything they can do to raise the CPI on their farm — and thus raise value. The answer is no. You can increase value by improving soil health and drainage, among other things, but the CPI is based solely on the soil types on your land.

Soil quality is just one characteristic that brings value to a farm, but when we sell a farm with a CPI of roughly 88 and above, it is usually a good indicator of higher-value land. In regions where lower-quality soil types are more prevalent, land values tend to be a little lower.

Drainage tile present in dense soils and irrigation systems present in light soils can be a mitigating factor on a farm that adds value.

Here are a few sales of note that took place in the past month.

Sibley County

Northeast of Winthrop. About 80 acres sold for $11,300 per acre. The farm consisted of 74.65 tillable acres with a CPI of 91.8.

Renville County

Southeast of Franklin. About 39.95 acres sold for $10,600 per acre. The farm consisted of 39 tillable acres with a CPI of 88.7.

Goodhue County

West of Lake City. About 87.82 acres sold for $9,400 per acre. The farm consisted of 87 tillable acres with a CPI of 71.

Polk County

South of Alvarado. About 159.1 acres sold for $8,850 per acre. The farm consisted of 149.63 tillable acres with a CPI of 91.6.

Dakota County

South of Miesville. About 58.29 acres sold for $12,700 per acre. The farm consisted of 54 tillable acres with a CPI of 71.9. The farm also came with two building rights in a developing area.

Augustine is a Minnesota licensed real estate salesperson for Hertz Farm Management Inc. He lives near Minnesota Lake with his wife and four children and works out of Hertz’s Mankato office. Hertz Farm Management compiled the list but did not handle all sales. Call Hertz in Mankato at 507-345-5263, or 800-730-5263, or visit hertz.ag.