It’s hard to believe we’re already approaching the dog days of summer. Not all that long ago we were watching corn and soybean planters race to complete spring planting due to the very uneven start to the 2019 crop season. In many Midwest areas, planting efforts didn’t conclude until the beginning of July.

While Iowa was far from perfect with 2019 planting and early-season crop conditions, the impact of the incredible struggles in Illinois, Indiana, Missouri and Ohio makes conditions in Iowa look pretty tame. The corn and soybean markets have also noticed and responded to move appreciably higher. All of this is sure to impact the Iowa farmland market as we approach the typical fall sales season.

Coming into spring 2019, Iowa and Midwestern farmland values were largely stable. Good farms — those with above-average soil types, adequate drainage, easy farm-ability and well-managed fertility — were selling best. Since the growing season started, there have been enough sales across Iowa to conclude the market is still stable — and maybe just a little stronger since June began.

People have asked me this summer, “How can we be talking about things being stable to stronger in Iowa after the difficulties of 2019 planting season?”

Fair question. The answer is rooted in the reality that it appears much of Iowa is going to grow at least into an average crop in 2019, if not slightly above average.

With an average to above-average crop, stronger commodity prices could provide a real boost in profitability for Iowa farmers and landowners in 2019 because of the even larger problems elsewhere across the Corn Belt. Is this outcome guaranteed? Of course, not. However, coming into the 2019 growing season, farmers were buying nearly 8 out of every 10 farms brought to the market. And if Iowa farmers realize increased profits in 2019, it’s quite possible that Iowa land market will show signs of broad price support and strength not seen in recent years.

Local growing conditions vary widely

With that said, don’t forget about market fundamentals. The farmland market reflects the collective confidence of all the participants in the market. When things are going well, farmland values tend to be stable to higher, while weakness in land values shows up when things are not working well.

Locally speaking, there are always value differences when comparing one specific neighborhood to another. Localized growing conditions and local sale volumes will be two areas to watch through the end of the year, given the major growing season differences this year. Those differences are likely to show up this fall in the land market.

For U.S. agriculture, there are also several issues of note. The current interest rate environment and forward-looking guidance is more “dovish” than just six months ago. Lower rates will be supportive to anyone who needs to borrow money and will also be supportive to the farmland market.

In addition to lower interest rates, consider the impact of stronger commodity prices. Corn and soybean prices significantly influence actual farm profitability, as well as the collective confidence of the Midwest land market. With 2019’s problematic growing season, the massive stocks we carried into this year may get whittled down a bit, creating a more positive outlook for 2020 — assuming demand doesn’t wane too much.

Although it appears the focus of early 2019 has now shifted from trade issues to production issues in the current crop year, the fact remains we’re still locked in a global trade conflict, with particular attention on China. Discussions aimed at resolving our trade conflicts appear to be ongoing and will continue to impact commodity prices and underlying asset values, including farmland.

Finally, don’t ignore the possibility of a major “black swan” type of unexpected market-moving event. If African swine fever were to reach the U.S., it would be a big deal, and it would be damaging to our markets.

NORTHWEST

Clay County. Northeast of Gillett Grove, 79 acres recently sold at public auction for $8,500 per acre. The farm consists of 77 tillable acres with an 82.7 CSR2, which equals $105 per CSR2 point on the tillable acres.

NORTH CENTRAL

Mitchell County. Near St. Ansgar, 160 acres sold in an online auction for $7,100 per acre. The farm has 131 tillable acres with an 87.4 CSR2, which equals $99 per CSR2 point on the tillable acres.

NORTHEAST

Buchanan County. South of Hazelton, 42 acres sold for $4,705 per acre. The farm has 42 tillable acres with a 44.7 CSR2, which equals $105 per CSR2 point on the tillable acres.

WEST CENTRAL

Sac County. East of Wall Lake, 115 acres sold at public auction for $10,500 per acre. With 113 tillable acres and an 87.6 CSR2, this equals $122 per CSR2 point on the tillable acres.

CENTRAL

Story County. North of Story City, 73 acres sold at public auction for $10,600 per acre. With 72 tillable acres and an 87.2 CSR2, the sale equals $123 per CSR2 point on the tillable acres.

EAST CENTRAL

Benton County. South of LaPorte City, 59 acres sold for $10,300 per acre. The farm has 59 tillable acres with an 86.4 CSR2, which equals $119 per CSR2 point on the tillable acres.

SOUTHWEST

Montgomery County. East of Elliott, 70 acres sold for $7,300 per acre. With 67 tillable acres and 68.8 CSR2, the sale equals $111 per CSR2 point on the tillable acres.

SOUTH CENTRAL

Madison County. Southwest of Winterset, 60 acres sold in an online auction for $5,500 per acre. The farm consists of 49 tillable acres with a 67.5 CSR2, which equals $99 per CSR2 point on the tillable acres.

SOUTHEAST

Washington County. South of Riverside, 80 acres sold at public auction for $11,000 per acre. The farm has 77 tillable acres with a CSR2 of 89.9 and equals $127 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.