November 16, 2017
Throughout Iowa, impressive corn and soybean yields this year surprised many market observers who were expecting smaller yield totals due to lack of regular and widespread summer rainfall.
However, early fall land sales appeared to confirm the September data release of the Iowa Land Institute farmland value survey, which reported land values increasing 2% since March 2017.
The stability and strength in the marketplace is varied, however. Differences from neighborhood to neighborhood (or sale to sale) can be seen, and the strongest land values continue to be in the sale of top-quality farms with highly productive soils, solid fertility and drainage, and high “farm-ability” (e.g., large and square fields with few point rows, waterways or obstructions).
Both local and nonlocal investor interest in farmland continues to be seen, and this interest is providing an additional layer of market depth and stability. Interest rates remain low, and given the lack of attractive investment alternatives, nonfarming investors continue to hold a general belief that farmland is a strong tangible asset and sound overall investment.
All that said, low commodity prices and somewhat weak on-farm profitability continue to keep a lid on land values. And in locales with multiple recent land sales, the use of available capital to buy more land has created the potential for localized price weakness. Keep an eye on local areas where several sales are happening, and understand that this may be a marker for potential land price weakness on other upcoming sales in that area.
O’Brien County: West of Royal, 237 acres recently sold at public auction. Parcel 1, 80 acres with a 97.4 CSR2, sold for $11,100 per acre. Parcel 2, 78 acres with a 96.9 CSR2, sold for $12,000 per acre. Parcel 3, 79 acres with a 97.4 CSR2, sold for $11,100 per acre.
Floyd County: Near Floyd, 169 acres sold at public auction. Parcel 1, 73 acres with an 83.2 CSR2, sold for $8,650 per acre, or $108 per CSR2 point. Parcel 2, 96 acres with a 71.2 CSR2, sold for $6,000 per acre, or $91 per CSR2 point.
Fayette County: North of Hawkeye, 148 acres sold for $6,158 per acre. The farm has a CSR2 of 84.5 on 134.6 cropland acres. Seller is a family trust; buyer is a local investor.
Greene County: In Kendrick Township, 339 acres sold in two parcels. Parcel 1 is 166 acres and sold for $4,500 per acre. It has 84.8 crop acres with an average CSR2 of 66.0, which equates to $134 per CSR2 point. Parcel 2 is 233 acres and sold for $9,000 per acre. It has 212.5 crop acres with an average CSR2 of 86.This sale equals $115 per CSR2 point.
Poweshiek County: In Deep River Township, 160 acres sold for $4,450 per acre. The 74.2 crop acres have a 69.5 CSR2. The parcel also includes 22.5 CRP acres. The sale equals $138 per CSR2 point on the crop acres.
Jones County: East of Martelle, 149 acres sold in two parcels at public auction. Parcel 1 is 111 acres, of which 103.1 acres is cropland with an 84.6 CSR2. It sold for $8,800 per acre to a local farmer. Parcel 2 is 38 acres, of which 36.8 acres is cropland with an 89.9 CSR2. It sold for $10,000 per acre to a local investor. Seller was an estate.
Page County: The farm’s 125 acres sold for $4,815 per acre. The farm has 114.9 cropland acres with a 38.4 CSR2 average (the old CSR rating was 62.1). The sale equals nearly $136 per CSR2 point per crop acre, or $5,221 per cropland acre.
Madison County: West of Winterset, 40 acres sold at public auction for $2,850 per acre. The farm has 29.4 cropland acres, with a 41.9 CSR2 average. Balance is in timber and a creek.
Jefferson County: North of Fairfield, 33 acres sold at public auction for $6,200 per acre. The farm has 29.2 cropland acres with a 70.3 CSR2. Sale equals $100 per CSR2 point per crop acre, or $7,007 per tillable acre.
Hertz Real Estate Services compiled this list, but not all sales were handled by Hertz. Call Hertz at 515-382-1500 or visit hertz.ag.
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