Early this winter, the Iowa farmland market turned sideways with a slight uptick; a welcome respite from a downward trend that started in spring 2013. Strongest values continue to be for high-quality farms (excellent soils and drainage), as well as for farms located adjacent to strong farmland owners. When it comes to farmland for sale, “who the neighbors are” can significantly influence the sale price.
Iowa farms harvested record-high corn and soybean yields in 2016. The high yields, some recent strength in crop prices, plus ARC-County farm program payments received last fall, have helped.
Farmland sales activity has declined slightly each year for the past five years. Farmland owners and investors have had an increase in purchasing interest, particularly from nonfarming landowners and investment buyers. This is in reaction to a search for solid investments, low-interest rates, and a general belief that farmland is a tangible asset and sound investment.
Record-low interest rates for financing farmland, “underdeployed cash,” a lack of farmland offered for sale on the market and record-high yields support farmland market prices and reduce the move to lower values. These positive factors are countered by interest rates that are beginning to increase. Borrowing interest rates have increased by about 1%.
Potential buyers would like to buy farmland at prices they anticipate may be reached next year, while sellers wish they could sell for prices available two years ago.
Lyon County: Southeast of Larchwood, 97.93 acres sold at public auction for $12,400 per acre. The farm has 94 crop acres and a 68.8 CSR2. Primary soils are Moody, Trent, Ackmore, Colo and Marcus. The farm PLC corn yield is 186 and the soybean yield was 51.
Winnebago County: Located 4.5 miles south of Buffalo Center, 160 acres sold at public auction for $8,600 per acre to an investor-landowner. The farm has 153 crop acres with an average CSR2 of 80.5.
Fayette County: Southwest of Waucoma, 147.43 acres sold at public auction in two parcels for $8,347 per acre. Parcel 1 has 39 acres with a 55.4 CSR2 on 38.31 tillable acres. Parcel 2 has 108.43 acres with a 65.4 CSR2. Seller is an estate; buyer is a local farmer.
Ida County: West of Ida Grove, 300 acres sold in three parcels. Parcel 1, which has 90 acres, 83.5 crop acres and a 79.4 CSR2, sold for $9,050 per acre, or $123 per CSR2 point per crop acre. Parcel 2 has 79 acres, 78.5 crop acres and a 52.6 CSR2. It sold for $5,200 per acre, or $99 per CSR2 point per crop acre. Parcel 3, which has 131 acres, 129.8 crop acres and a 62.2CSR2, sold for $7,550 per acre, or $122 per CSR2 point per crop acre.
Webster County: In Lost Grove Township, 155 acres sold in two parcels at auction. Parcel 1 consists of 80 acres and sold for $9,000 per acre. It has 79 crop acres with an 83 CSR2 and equates to a sale of $110 per CSR2 point per crop acre. Parcel 2 with 75 acres sold for $7,700 per acre. It has 70.9 crop acres with an 81.9 CSR2. This equates to $99 per CSR2 point per tillable acre.
Scott County: North of Blue Grass, 153 acres sold for $7,050 per acre at public auction. The farm has 137.2 crop acres with a72.1 CSR2. Remainder of the farm includes CRP, waterways and a grain bin. Buyer is a local farmer; seller is an estate.
Fremont County: Northeast of Hamburg, 230 acres sold for $4,800 per acre. The farm has 184.51 crop acres with a 71.1 CSR2. This equates to $84.19 per CSR2 point per crop acre.
Warren County: Northeast of Milo, 80 acres sold for $3,797 per gross acre. The farm has 59.4 tillable acres and a 47.7 CSR2. The farm includes 15 acres of timber.
Henry County: North of Mount Union, 81.82 acres sold at public auction for $10,100 per acre. The farm has 80 acres of cropland with a CSR2 of 90.
Hertz Real Estate Services compiled this list, but not all sales were handled by Hertz. Call Hertz at 800-593-5263 or visit hertz.ag.