October 14, 2024
In last month’s column, I mentioned that Iowa land values had been “stickier” than some had expected through the first three-quarters of the year. After all, lower commodity prices and a higher interest-rate environment each significantly pressured the land market. It was only natural to expect those pressures to negatively impact values.
In late September, we received confirmation of exactly that on a statewide basis. The Iowa Realtors Land Institute biannual survey reported a 5% across-the-board softening in Iowa farmland values. This recent report followed a more subtle and geographically uneven negative shift (-3%) from the March 2024 RLI report. This serves as the clearest sign to date that Iowa land values are softening.
On the flip side, early harvest results generated more smiles than frowns. And the recent short-term interest rate cut by the Federal Reserve is helpful to anyone who has debt or may be borrowing money this fall to buy a farm.
However, it is now clear the land market is shifting lower, and most of the early-fall land auctions reflected recalibrated seller expectations.
Of course, no seller wants to admit they have missed the “high” in the market, but the vast majority understand the big picture. There are still plenty of buyers for additional land being offered to the market. They are just not willing to pay quite as much as a year ago because profits are down, working capital protection is crucial and the forward outlook for 2025 is even less certain.
As I often say, the market is really smart. That said, the market is functioning — and there have still been some impressive sales in the past 45 days, including several noted below.
O’Brien County. Southeast of Hartley, ±80 acres recently sold at public auction for $15,900 per acre. The farm consisted of ±75 tillable acres with a CSR2 (Corn Suitability Rating index) of 96.7, and equaled $175 per CSR2 point on the tillable acres.
Floyd County. East of Alexander, ±160 acres recently sold at public auction for $13,600 per acre. The farm consisted of ±155 tillable acres with a CSR2 of 76.7, and equaled $183 per CSR2 point on the tillable acres.
Fayette County. Southeast of Hawkeye, ±72 acres recently sold at public auction for $10,500 per acre. The farm consisted of ±70 tillable acres with a CSR2 of 88.2, and equaled $122 per CSR2 point on the tillable acres.
Ida County. East of Arthur, ±80 acres recently sold at public auction for $14,200 per acre. The farm consisted of ±77 tillable acres with a CSR2 of 85.1, and equaled $173 per CSR2 point on the tillable acres.
Story County. South of Zearing, ±77 acres recently sold for $12,900 per acre. The farm consisted of 74 ±tillable acres with a CSR2 of 85.8, and equaled $156 per CSR2 point on the tillable acres.
Jackson County. North of Spragueville, ±505 acres recently sold for $5,961 per acre. The combination farm consisted of ±291 tillable acres with a CSR2 of 42.9, and the balance in timber.
Page County. West of Villisca, ±77 acres recently sold at public auction for $13,600 per acre. The farm consisted of ±71 tillable acres with a CSR2 of 88.4, and equaled $167 per CSR2 point on the tillable acres.
Wayne County. West of Millerton, ±80 acres recently sold at public auction for $7,000 per acre. The farm consisted of ±73 tillable acres with a CSR2 of 55.9, and equaled $137 per CSR2 point on the tillable acres.
Henry County. South of Mount Pleasant, ±143 acres recently sold at public auction for $9,000 per acre. The farm consisted of ±139 tillable acres with a CSR2 of 55.2, and equaled $167 per CSR2 point on the tillable acres.
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