Good news — 2019 is almost over! When I’ve asked people if they are sorry to see 2019 end, the answer is most often a resounding “No.”
There are some years that folks are happy to put behind them, and 2019 is one of them. A slow and late fall harvest has capped it off. Delayed crop planting in spring, followed by a somewhat mild summer in which crops were slow to mature, positioned the late harvest start. Rains early in harvest delayed normal late-September and October harvest progress. Not to be outdone, snow in late October further complicated things. It’s been a tough year.
A long-term investment
While the short-term struggle of 2019 has been real for many, I’ve continued to be impressed by the long-term lens that farmland buyers use to view potential land purchases. Land is not an asset that causes current or prospective owners to become overly rattled by the struggle of a single year.
People who own land understand that some years will be more difficult, fun or successful — insert your preferred description — than others. That’s just part of land ownership and production agriculture. When a tough year shows itself, most folks find a way to absorb the blow and look toward the horizon of a more promising year.
Strangely, some years will be very difficult, yet still quite successful. That’s somewhat how I view 2019 for a large part of Iowa. It certainly hasn’t been easy, and the results haven’t been perfect. But by and large, we’ve had a successful growing season with respectable outcomes. That’s what is supporting the farmland sales environment across the region.
Lower interest rates
Our current interest rate situation is also supporting land sales in a meaningful way. A year ago, the Federal Reserve had been steadily increasing short-term rates, and those higher short-term rates influenced longer-term rates to creep higher in the second half of 2018. Anyone borrowing money was feeling the impact of higher rates.
The tone has changed in 2019 with a policy reversal from the Fed, with three short-term rate cuts — the most recent in October — and long-term rates have settled back to near record low rates. This has been very supportive to farmer-buyers and investor-buyers alike, and the land market in general.
We will probably talk about 2019 for many years to come. From spring flooding to fall blizzards, this year has left its mark. Despite the struggles, those involved in Iowa agriculture have persisted, and our farmland markets have continued to reflect strong resiliency.
Sioux County. East of Sioux Center, 67 acres recently sold at public auction for $18,300 per acre. The farm has 62 tillable acres with a 94.6 CSR2, which equals $209 per CSR2 point on the tillable acres.
Cerro Gordo County. Near Burchinal, 156 acres sold at public auction for $8,800 per acre. This farm, with 150 tillable acres and an 83.6 CSR2, equals $109 per CSR2 point on the tillable acres.
Clayton County. Northwest of Volga, 39 acres sold for $4,075 per acre. The farm consists of 36 tillable acres with a 39.6 CSR2, which equals $111 per CSR2 point on the tillable acres.
Crawford County. South of Schleswig, 75 net taxable acres sold at public auction for $7,400 per acre. The farm has 80 deeded gross acres with 77 tillable acres with a 62.2 CSR2, which equals $116 per CSR2 point on the tillable acres.
Story County. East of Cambridge, 132 acres sold at public auction for $10,200 per acre. The farm has 130 tillable acres with an 86.4 CSR2, which equals $120 per CSR2 point on the tillable acres.
Johnson County. Northeast of Iowa City, 104 acres sold for $8,800 per acre. The farm has 98 tillable acres and an 88.6 CSR2; the sale equals $105 per CSR2 point on the tillable acres.
Page County. Northeast of Clarinda, 206 acres sold at public auction for $9,550 per acre. The farm has 189 tillable acres and an 82.1 CSR2, which equals $127 per CSR2 point on the tillable acres. This farm also includes two modern 20,000-bushel grain bins built in 2013 and 2014.
Madison County. Northwest of Truro, 107 acres sold for $5,374 per acre. The farm consists of 82 tillable acres with an 83.1 CSR2, with the balance of land in timber and a creek. The sale equals $84 per CSR2 point on the tillable acres.
Wapello County. South of Ottumwa, 77 acres sold at public auction for $5,600 per acre. The farm has 77 tillable acres with a 58.1 CSR2, which equals $96 per CSR2 point on the tillable acres.
Hensley is president of Hertz Estate Services, which compiled this list but did not handle all sales. Visit hertz.ag.