There has been a good deal of variation in weather across the Iowa during the 2018 growing season. Many areas had adequate moisture throughout spring and summer (central and east central). Other areas have struggled at times with either too much (northwest, north central) or too little (southern) rainfall, and crops in these areas have suffered from less-than-ideal conditions. At one point this summer, we experienced historic flooding and moderate drought within just a few counties of each other. Fortunately, harvest numbers projected for the state will show another large overall crop. 

The farmland marketplace is gearing up for another fall-winter sales season. Because of localized differences in growing-season success, don’t be surprised if local influences play a slightly larger role in sale results this fall. In areas where another big crop is produced, we expect to see continued land market stability, even in the face of lower grain prices. In other areas where crop yields are disappointing, there is the potential for localized softness.

High-quality farms with the most productive soils, solid drainage, easy farmability and strong fertility will continue to sell best. Farmers are likely to remain the most prevalent group of buyers, even though many nonfarming investors continue to be active across Iowa. Again, it should not surprise anyone if there is an increase in uneven sale results — for farms of similar quality — in different areas, as we expect local factors to potentially play an increasing role in coming months.

To get a read on the mood of the market, keep your eyes fixed on several factors. First, the level of success (or lack thereof) in the 2018 growing season will help determine the “mood in the countryside” this fall. Second, increasing interest rates may continue to pressure farmland values. The Federal Reserve has made it clear it intends to continue raising short-term rates in the next six to 12 months. While short-term rates don’t directly impact long-term borrowing costs, short-term rates do directly impact farm operating notes. Indirectly, we anticipate that long-term rates are likely to continue creeping upward in coming months as well. Third, the disruption created in the commodity markets by enactment of global trade tariffs is real and has softened markets, particularly for soybeans. How global trade negotiations play out in the days and months ahead will continue to impact commodity prices and, ultimately, underlying asset values including farmland.

Finally, watch negotiations currently occurring on the new farm bill. This policy is likely to impact the countryside for the next several years. Stay tuned for further analysis as new information surfaces on all these topics.

NORTHWEST
O’Brien County: South of Hartley, 120 acres recently sold at public auction for $10,550 per acre. The farm consists of 110 tillable acres with a 94.8 CSR2. This equals $121 per CSR2 point on the tillable acres.

NORTH CENTRAL
Franklin County: At a public auction, 156 acres sold for $9,100 per acre. The farm has 152 tillable acres with an 81.2 CSR2, and includes two wind turbines paying $4,000 each annually, with future payment escalators. The sale equals $115 per CSR2 point on the tillable acres.

NORTHEAST
Delaware County: Northwest of Greeley, 64 acres recently sold for $4,221 per acre. The farm consists of 33 tillable acres with a 56.1 CSR2 on the cropland. The buyer is a local farmer.

WEST CENTRAL
Monona County: Northeast of Ticonic, 52 acres sold for $4,550 per acre. The farm has 42 tillable acres with a 20.1 CSR2. The sale equals $280 per CSR2 point on the tillable acres (yes, you read that right).

CENTRAL
Hardin County: Southwest of Buckeye, 156 acres sold at public auction for $9,250 per acre. The farm has 151 tillable acres with an 84 CSR2. The sale equals $113 per CSR2 point on the tillable acres.

EAST CENTRAL
Clinton County: Northwest of Andover, 160 acres sold at public auction for $6,450 per acre. The farm has 135 tillable acres with an 80 CSR2. The sale equals $95 per CSR2 point on the tillable acres. The farm also includes 5.5 acres enrolled in the Conservation Reserve Program, and an older house and buildings.

SOUTHWEST
Adair County: Southwest of Adair, 120 acres recently sold for $3,858 per acre. The farm has 92 tillable acres with a 52.4 CSR2. The sale equals $96 per CSR2 point on the tillable acres.

SOUTH CENTRAL
Clarke County: West of Woodburn, 130 acres sold at public auction for $4,080 per acre. This CRP parcel has a 62.3 CSR2, along with 18 acres of timber.

SOUTHEAST
Van Buren County: Located near Keosauqua, 83 acres sold for $2,950 per acre. The farm has 49 tillable acres with a 43.4 CSR2. The cropland is currently in hay production, and the balance of the farm is pasture and timber.

Hertz Real Estate Services compiled this list, but not all sales were handled by Hertz. Call Hertz at 515-382-1500 or 800-593-5263 or visit hertz.ag.