As I sit down to write this month’s article, I feel like I’m staring at the starting gates of a horse race, just waiting for the announcer to declare, “And they’re off!” Normally by this time, we’ve already seen combines start to nose their way into fields across rural America, but this year, everything has been just a little different. Later. Harder. And wetter.
While every year is different, 2019 has been more different than most, and there’s likely to be some impact on the Iowa land market as we look back.
Coming into spring things were stable, and while all farms were moving, premium farms were selling best. With the meaningful move higher in early-summer commodity prices, stability continued. And as we entered August, the land market seemed to have strengthened just a bit.
That strength was rooted in the belief that most of Iowa was growing an average-plus crop to go along with stronger commodity prices through much of the summer. The Iowa land market seemed positioned to benefit from the “tougher-sledding” faced by our neighboring states, as there has been an expectation that 2019 would produce improved margins and overall profitability for Iowa farmers and landowners.
Better crops but weaker demand
That market excitement has been tempered a bit over the past 30 days. The USDA statistics folks took some of the available oxygen from the commodity price rally in mid-August, based on their better-than-expected production numbers for the 2019 corn and soybean crops. There’s also the issue of weaker demand for our crops, which has created additional late-season commodity price pressure. Despite this, many participants in the Iowa farmland market still expect land price strength and support this fall. And farmers still appear to be willing bidders at early-fall sales.
While it won’t happen in every corner of the market, if the solid crop harvest materializes, farmers are likely to crawl out of their combine cabs with a smile on their face. Some areas have struggled all year long, and for them, the idea of land market strength is crazy talk.
But those weak areas are more limited in the state of Iowa than in neighboring states, and I further believe Iowa farmers will likely drive the broader Iowa farmland market into the plus column when we look back on the results of 2019.
There are other factors also in play across our farmland marketplace (interest rates, trade and tariff issues, Market Facilitation Program payments, etc.). I’ll again address some of those larger issues in next month’s column. For now, keep your eyes out for early-fall auction results, and we will meet back here to talk again next month, as “the lead horse is hitting the second turn”!
Palo Alto County. North of West Bend, 85 acres recently sold at public auction for $10,600 per acre. The farm consists of 85 tillable acres, with an 84.4 CSR2, which equals $125 per CSR2 point on the tillable acres.
Mitchell County. North of Mitchell, 155 acres sold at public auction for $6,900 per acre. The farm has 148.3 tillable acres, with an 81.9 CSR2, which equals $88 per CSR2 point on the tillable acres.
Delaware County. North of Greeley, 78 acres sold for $3,439 per acre. The farm has 21 tillable acres, with a 25.5 CSR2, and the balance of acres in timber and pastureland.
Shelby County. Northwest of Portsmouth, 79 acres sold at public auction for $8,100 per acre. The farm consists of 79 tillable acres, with a 58.4 CSR2, which equals $138 per CSR2 point on the tillable acres.
Hamilton County. West of Blairsburg, 320 acres sold at public auction for $9,525 per acre. The farm was offered in four parcels and consists of 311.52 tillable acres, with an 85.1 CSR2. The sale equals $115 per CSR2 point on the tillable acres, and one buyer purchased all four parcels.
Muscatine County. Southeast of Wilton, 81 acres sold for $9,815 per acre. The farm consists of 78 tillable acres, with a 94.1 CSR2, which equals $108 per CSR2 point on the tillable acres.
Pottawattamie County. Southwest of Treynor, 175 acres sold at public auction for $5,800 per acre. With 168 tillable acres and a 64.4 CSR2, this sale equals $94 per CSR2 point on the tillable acres.
Appanoose County. South of Unionville, 44 acres sold at public auction for $3,750 per acre. The farm has 38 tillable acres, with a 46.6 CSR2, which equals $93 per CSR2 point on the tillable acres.
Washington County. Located near Wellman, 68 acres sold at public auction for $13,603 per acre. With 68 tillable acres that have an 84.0 CSR2, this sale equals $162 per CSR2 point on the tillable acres.
Editor’s note: In the July column, a 146-acre sale in Hancock County was referenced as selling for $9,247 per acre, or $114 per CSR2 point on the tillable acres. This was an error, as the $9,247 per acre price was the asking price for the farm. The land actually sold for $8,600 per acre, or $106 per CSR2 point on the tillable acres. We apologize for the error.
Henley is president of Hertz Real Estate Services, which compiled this list but did not handle all sales. Visit hertz.ag.