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Serving: IA

Fall land sales bring impressive results

hauged/Getty images Cornfield ready for harvest late afternoon
LAND BOOM: Fall harvest is ahead of schedule, and there are plenty of land sales happening even as combines roll. And prices keep rising.
Iowa farmland transactions have been moving at a breakneck pace, showing big gains.

Fall harvest came on fast in early September and has progressed at a similar pace. I expect harvest operations will be nearly complete by Halloween. Yield results have been more positive than negative, although there is typical variability from area to area.

Farmland sales have been on a breakneck pace, as dozens of early fall public auctions have already occurred in September and October, with impressive price results. The Iowa Chapter of the Realtors Land Institute released its fall 2021 farmland value survey in the past month, and the survey of brokers and auctioneers reflected Iowa farmland values 18.8% higher since the March 2021 survey. When coupled with the 7.8% statewide increase that this same group reported back in March, it is clear that Iowa land values are at least 25% higher on a year-over-year basis (e.g., September 2020 to September 2021).

Strong 2021 on-farm profits, still-elevated grain prices for 2022 forward production and attractively low interest rates all continue to support land values at these higher levels. There has been a very large volume of new farmland sales that has come to the market over the past 90 days. Early this summer, there were fewer sales, and each sale seemed to explode a little higher than the last. So, because of the larger sale volume this fall, this major push higher in values (from one sale to the next) seems to have started to temper, at least a bit. This is the typical supply-demand readjustment that occurs in a properly functioning market (e.g., as more farms have come to the market, the heavy demand to purchase is being satisfied).

As we look forward toward 2022, higher crop input prices remain a concern, as profit margins will likely tighten from 2021 levels. However, as the sales below indicate, land buyers are maintaining their positive forward outlook.

Northwest

Pocahontas County. Southwest of Havelock, about 210 acres recently sold at an online public auction for $13,800 per acre. The farm consisted of 199 tillable acres with a CSR2 (corn suitability rating) of 85.7 and equaled $170 per CSR2 point on the tillable acres.

North Central

Floyd County. Near Colwell, about 60 acres recently sold at public auction for $11,000 per acre. The farm consisted of 57 tillable acres with a CSR2 of 80.4 and equaled $144 per CSR2 point on the tillable acres.

Northeast

Black Hawk County. Northeast of Waterloo, about 174 acres recently sold at an online public auction for $11,700 per acre. The farm consisted of 165 tillable acres with a CSR2 of 89.7 and equaled $138 per CSR2 point on the tillable acres. This farm included several waterways and terraces, and had a corner cut by a creek.

West Central

Audubon County. West of Audubon, about 152 acres recently sold at public auction for $12,600 per acre. The farm consisted of 151 tillable acres with a CSR2 of 73.1 and equaled $173 per CSR2 point on the tillable acres.

Central

Hardin County. South of Radcliffe, about 120 acres recently sold at public auction for $12,200 per acre. The farm consisted of 116 tillable acres with a CSR2 of 85.0 and equaled $148 per CSR2 point on the tillable acres.

East Central

Iowa County. Northwest of Williamsburg, about 77 acres recently sold at public auction for $9,900 per acre. The farm consisted of 73 tillable acres with a CSR2 of 59.9 and equaled $174 per CSR2 point on the tillable acres.

Southwest

Pottawattamie County. Southwest of Missouri Valley, about 303 acres recently sold at public auction for $5,100 per acre. The farm consisted of 289 tillable acres with a CSR2 of 44.3 and equaled $120 per CSR2 point on the tillable acres. This farm is mostly levy-protected, and included three center pivots watering approximately 240 acres, served by two pivot engines and two wells and pumps.

South Central

Union County. Northwest of Creston, about 283 acres recently sold at public auction for $8,300 per acre. The farm consisted of 248 tillable acres with a CSR2 of 71.7 and equaled $132 per CSR2 point on the tillable acres.

Southeast

Washington County. West of Washington, about 80 acres recently sold at public auction for $16,800 per acre. The farm consisted of 79 tillable acres with a CSR2 of 84.7 and equaled $200 per CSR2 point on the tillable acres.

Hensley is president of Hertz Real Estate Services, which compiled this list. Not all sales were handled by Hertz. Call Hertz at 515-382-1500 or 800-593-5263, or visit Hertz.ag. 

 

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