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Serving: IA

Land values stay strong as year winds down

deyanarobova/Getty images Corn stalks with silos in the background
SALES KEEP ROLLING: The latest recording of sales around Iowa show no signs of values slipping. Farmland remains a popular investment.
There was plenty of land available, and investors were buying.

Last month, I mentioned that harvest would likely conclude by Halloween. It now appears that the wet weather we experienced in mid- to late October pushed that that bogey into November. As I visit with farm operators across Iowa, it seems a good week of weather will largely wrap things up.

Despite abnormally dry conditions during the growing season for a good chunk of Iowa, 2021 crop yields have both surprised and impressed — with especially strong soybean yields. Commodity prices remain elevated.

However, looking forward to 2022, high corn input prices are giving pause. The pause is particularly true for dry fertilizer and anhydrous ammonia, where suppliers are messaging what is now becoming a common theme across the U.S. economy — supply shortages.

In the farmland market, there have not been too many shortages lately. No shortage of sales — volume has spiked, with opportunist sellers piling into the market. No shortage of buyers — farmers and investors have both been very active market participants. And no shortage of record prices —lots of recent sales of $15,000 to 20,000 per acre across the state, and even a few sales well above that level.

Land sales map

Without question, it has been an incredible year for Iowa farmland, supported by a year of likely record earnings, still-low interest rates, a 2022 commodities market with profit potential, and growing concerns about inflation in our nation (and farmland has historically performed well in inflationary environments).

Will land prices continue to surge? I suspect that the run higher in land prices will moderate or level off this winter, as it seems that positive current conditions are being fully factored into recent land sale results. As the sales below indicate, however, enthusiasm for buying land has been high and widespread.

NORTHWEST

Sioux County. Southwest of Rock Valley, 157 acres recently sold at public auction for $14,200 per acre. The farm consisted of 151 tillable acres with a CSR2 (corn suitability rating) of 84.6, and equaled $174 per CSR2 point on the tillable acres.

NORTH CENTRAL

Franklin County. Near Latimer, 80 acres recently sold at public auction for $11,800 per acre. The farm consisted of 75 tillable acres with a CSR2 of 75.6, and equaled $166 per CSR2 point on the tillable acres.

NORTHEAST

Fayette County. Northeast of Oelwein, 77 acres recently sold at public auction for $13,100 per acre. The farm consisted of 77 tillable acres with a CSR2 of 89.1, and equaled $147 per CSR2 point on the tillable acres.

WEST CENTRAL

Harrison County. Northeast of Woodbine, 233 acres recently sold at public auction for $17,000 per acre. The farm consisted of 238 tillable acres with a CSR2 of 88.2, and equaled $189 per CSR2 point on the tillable acres.

CENTRAL

Story County. Near Cambridge, 237 acres recently sold at an online virtual public auction for $14,700 per acre. The farm consisted of 230 tillable acres with a CSR2 of 84.4, and equaled $179 per CSR2 point on the tillable acres.

EAST CENTRAL

Johnson County. Northwest of Swisher, 76 acres recently sold at public auction for $21,000 per acre. The farm consisted of 77 tillable acres with a CSR2 of 93.1, and equaled $223 per CSR2 point on the tillable acres.

SOUTHWEST

Mills County. South of Malvern, 157.15 acres recently sold at an online virtual public auction for $14,500 per acre. The river-bottom farm consisted of 149 tillable acres with a CSR2 of 84.7, and equaled $181 per CSR2 point on the tillable acres.

SOUTH CENTRAL

Decatur County. West of Garden Grove, 100 acres recently sold at public auction for $8,100 per acre. The farm consisted of 96 tillable acres with a CSR2 of 52.0, and equaled $162 per CSR2 point on the tillable acres.

SOUTHEAST

Jefferson County. South of Batavia, 79 acres recently sold at online auction for $13,200 per acre. The farm consisted of 75 tillable acres with a CSR2 of 71.2, and equaled $195 per CSR2 point on the tillable acres.

Hensley is president of Hertz Real Estate Services, which compiled this list but did not handle all sales. Call Hertz at 515-382-1500 or 800-593-5263, or visit hertz.ag.

 

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