Dakota Farmer

Land auctions show strong demand

Land Sales: Late spring sales see adjustment in land prices.

Max Steffes

May 21, 2024

2 Min Read
A hand holding a bag of money with farm field in background
STRONG DEMAND: Recent farmland auctions in North Dakota’s Red River Valley show that while prices are correcting, demand is as strong as ever.Andrii Yalanskyi/Getty Images

Financial projections for the 2024 crop year are much different than even last year. One look at the commodity board tells you what you need to know. Typically, weakening commodity prices eventually trickle down to the land. While commodity prices started their correction during the first half of 2023, we saw little change or adjustment in land prices until recently.

For example, on May 9, we had a large land auction in the Red River Valley for 927 acres. Overall bidder demand was great, with 40 registered from several states. Local farmers and investors were active participants. Here are the results from that sale:

Cass County land auction – 927 acres

Hunter, N.D.

  • Tract 1: $5,220/AC

  • Tract 2: $6,610/AC

  • Tract 3: $5,110/AC

  • Tract 4: $7,660/AC

  • Tract 5: $5,120/AC

  • Tract 6: $5,830/AC

Total average: $5,940/AC

How does this compare with a year ago or even six months ago? While there was still wonderful demand, recent auctions have shown us that prices have corrected somewhat. For example, in November, we sold 947 acres of land about 10 miles to the north of the property for an average of $6,200/AC. In December, a higher-quality quarter 3 miles to the east sold for $8,600/AC.

Late spring auction sales historically haven’t performed as well as land auctions in the early spring or late in the year, so some seasonal adjustments are necessary when analyzing this auction. Even so, I think it’s safe to say that the land market has peaked and is cooling off in most areas. Buyers still remain active; however, they are now much more discerning and cautious than they were perhaps a year ago.

While some farms will change hands in June, the next major selling window is in late August and into early September before soybean harvest, and it will be interesting to watch what happens this year. My prediction? Prices will remain flat to slightly down (5% or less) on the good stuff and continue to correct on poor land defined by bad drainage, soils or access. If we have a rally in commodity prices or a major work event occurs (election year, anyone?), all bets are off!

About the Author(s)

Max Steffes

Max Steffes is a director of real estate for Steffes Group LLC in West Fargo, N.D. Steffes Group also has offices in Iowa and Minnesota.

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