As we close the book on 2020, it will be nice to put this year in the rearview mirror. All the issues we faced — COVID-19, drought during the growing season, the derecho and a rough-and-tumble election — created an incredibly disrupted environment. Despite that, our current farmland market has proven incredibly resilient, and Iowa farmland values seem to have held their own. Now, values may even be showing a slight turn higher. How is this possible? Somehow the underlying drivers for farmland have positively aligned.

Specifically, corn and soybean markets rallied  big time beginning in August and have continued higher into and through the harvest season. Producers currently enjoy commodity prices that are near the high-water mark of the past two to three years. As recently as Aug. 1, there is almost no one who would have believed this was possible.

Low interest rates continue

Nearly as significant as the runup in commodities, farmland buyers across Iowa are also enjoying the substantial benefits from generationally low long-term interest rates.

When the impacts of COVID-19 upended our economy, the response from the U.S. Federal Reserve was to slash short-term interest rates to zero, and to do whatever was necessary to create and support an environment for low long-term rates (major bond-buying, etc.). The Fed’s goal was to spur business spending and economic activity, and thus far, the low rates have definitely spurred additional interest in buying land.

Next, continued government support for agriculture is not all that surprising in an election year. Ag is a major constituency that crosses several important state borders. Over the past three years, President Donald Trump has made his trade policies politically palatable, so to speak, by using government program dollars to fill the cash-flow gaps that his policies opened.

Several rounds of Market Facilitation Program payments in 2018 and 2019 (e.g., due to China’s tariffs), coupled with two rounds of Coronavirus Food Assistance Program payments in 2020, were examples. For farmers and landowners alike, the continuation of government payments has been land-value supportive.

Watch for uptick in sales

Finally, as of the writing of this article, the outcome of the election is not yet known. Depending on who wins, we may see an uptick in sales volume for farms. But thus far in 2020, low sale volumes were one of the more significant factors underlying stable-to-stronger land.

If that were to change substantially and we were to see a larger volume of land come to the market, the chemistry of the market may shift. Here in early November, however, that has not happened — and the early-fall sales noted below represent what some have been calling a seller’s market.

Northwest

Palo Alto County. Southeast of Emmetsburg, 134 acres sold at public auction for $11,800 per acre. The farm consists of 130 tillable acres with an 84.9 CSR2, which equals $143 per CSR2 point on the tillable acres.

North central

Franklin County. Near Sheffield, 115 acres sold at public auction for $8,800 per acre. The farm has 107 tillable acres with an 85 CSR2, which equals $111 per CSR2 point on the tillable acres.

Northeast

Fayette County. West of West Union, 149 acres sold at public auction for $8,100 per acre. The farm has 137 tillable acres with an 80.4 CSR2, which equals $110 per CSR2 point on the tillable acres.

West central

Calhoun County. North of Lohrville, 80 acres sold at public auction for $9,900 per acre. The farm has 76 tillable acres with an 83.3 CSR2, which equals $125 per CSR2 point on the tillable acres.

Central

Jasper County. South of Colfax, 98 acres sold at public auction for $6,750 per acre. The farm has 95 tillable acres with a 68.2 CSR2, which equals $102 per CSR2 point on the tillable acres.

East central

Cedar County. East of Tipton, 198 acres sold for $11,378 per acre. The farm has 198 tillable acres with a 92.6 CSR2, which equals $123 per CSR2 point on the tillable acres.

Southwest

Pottawattamie County. Southeast of Council Bluffs, 236 acres sold at public auction for $9,450 per acre. The farm has 218 tillable acres with an 83.9 CSR2, which equals $122 per CSR2 point on the tillable acres.

South central

Marion County. South of Monroe, 120 acres sold at private auction for $12,300 per acre. The farm has 111 tillable acres with an 81.7 CSR2, which equals $163 per CSR2 point on the tillable acres.

Southeast

Henry County. Northeast of Mt. Pleasant, 115 acres sold at public auction for $8,350 per acre. The farm has 109 tillable acres, with an 81.1 CSR2, which equals $108 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. Visit hertz.ag.