Editor’s note: Max Steffes with Steffes Auctioneers will write a new column called Land Sales to cover land sales and prices around North and South Dakota, and offer recaps and forecasts for what’s next with land values.

by Max Steffes

Last year, Steffes Auctioneers conducted over 500 auction sales in 18 states. Over 7,500 pieces of construction equipment, 1,400 tractors, 1,200 trucks, hundreds of combines and 26,000 acres of land all traded hands through our auction sales. As always, doing what we do gives us a particular perspective and insight into what is happening in those areas.

Like many, we began 2023 with a bewilderment of sorts, trying to figure out how things could be so hot. Land prices were at record levels, and equipment prices weren’t far behind. Indeed, something had to give, and the markets would correct during the latter half of the year. While we did see some adjustments in pricing, we ended the year with a similar attitude in certain areas.

There was still a healthy and strong appetite for both land and equipment, especially when it comes to the “good stuff” — high-quality farmland as well as low-hour, well-maintained equipment, which has almost always been the case during the last few decades.

So, did things correct last year? Well, kind of. We noticed less interest and hesitation from bidders in some regions of the land market. In the Dakotas and Minnesota, we noticed a postharvest bump in land prices, spurred by optimism from a good crop and outstanding sugerbeet payment. With that said, there were some records on the land and equipment side of things.

Looking ahead

This year, of course, brings a whole new set of challenges. An opportunity to bid on new jobs, grow new crops, or buy another farm. Also, it is an election year, which always makes things interesting, especially in the environment we’re in now. Politics aside, and for whatever reason, election years have been good for both equity markets and land markets.

For Iowa farmland values, which have always been a benchmark for the greater Midwest, values have only gone down two times out of the last 10 presidential election cycles. Based on these statistics, there is an 80% chance that we’ll have a flat or up year. It’s hard for me to believe that when you look at the commodity board, interest rates and the yield prospects for this year.

For equity markets, such as S&P 500, the prospects are even better if you study history. Since the 1960 presidential election, the market has only gone down two times: once during the dot-com bust and once during the 2008 mortgage crisis.

So, buckle up, 2024 will be an interesting one. Time will tell!

Steffes is director of real estate for Steffes Auctioneers of Fargo, N.D. The Steffes Group has locations in South Dakota, Minnesota, Iowa and Colorado, and serves all of the Midwest and Rocky Mountain region. Email [email protected].