Another land sale in northern Indiana made headlines recently. Sold at auction by the Schrader Auction Company, Columbia City, it brought over $9,000 per acre. Sales going even higher have been reported in isolated sales within the state.
You could have probably bought the same land for $300 per acre in 1960, $3,500 in 1979, and $1,100 in 1982. Since the crash, or was it a correction, Hoosier land prices have been off to the races. Sometimes the ascent has been sharper than at other times, and lately it has been breathtaking. Just how high can it go.
I'm certainly not a prophet, especially on land values. After all, I bought a farm when I thought prices were on the downhill side in 1982, only to find the land was still overpriced. When I sold it to make it possible to buy a house for a budding family several years later, I got less than I paid for it. Had I held on to it, although it would have been difficult, today it would probably be worth four times what I paid for it, even though it's not the best land. So you may not want to take advice from me.
Nevertheless, It seems to me that what goes up can come down. Mike Boehlje, Purdue University ag economics professor, recently said that although he wasn't predicting corn prices for any one period, there was a good chance that at some point within the next five years corn will be back at $3 per bushel. He didn't say when or for how long, but he was making the point that current rosy prices aren't guaranteed to last forever. And in the case of land, it's only rosy if you're selling, not if you're trying to buy or even cash rent land. Cash rents continue to lag land values in the steep climb upwards, but they are definitely following an upward trend as well.
There are all kinds of scenarios that could result in land prices continuing to increase. There's an equal number that could point to them leveling off. And there are definitely scenarios that could result in lower farm prices sometime in the future. Some of them are tied to agriculture, some are more impacted by world and national events and may have little to do with the price of corn or soybeans.
Time will tell in the land that sold for $9,000 per acre in northern Indiana this spring was a bargain, or if someone is holding the wrong card when the wild game of Simon Says with land prices finally comes to an end.