April 2022 Wallace’s Farmer “MarketPlace Extra”

The strong farmland market across the State of Iowa continues to flex its muscle. Early 2022 sales volume is down in comparison to the last half of 2021, even though there are more early-season sales than we’ve seen in recent years. Incredibly strong grain prices, coupled with still low interest rates, have buyer demand still outpacing the available supply of farms to buy. It does appear we will see a bump higher in interest rates coming from the mid-March meeting of U.S. Federal Reserve bankers. This expected first move higher in short-term rates won’t be impactful enough to change the current direction of the land market. However, this move is anticipated to be just the first of several rate increases, which are designed to cool the inflationary pressures in our overall economy. As we’ve seen in the past, higher interest rates will also eventually impact the farmland markets.

Also, I mentioned last month the potential instability coming out of Ukraine may have an impact on our grain markets and subsequently trickle into our land markets. In the past 30 days, that’s exactly what has happened in a big way. Russia’s unprovoked invasion of Ukraine, and the fighting response from the people of Ukraine, have prospects forming for a long, drawn-out conflict. Because both nations are major wheat exporters, and Ukraine is also a major sunflower oil exporter, we are seeing prices for wheat, corn, and soybeans shooting higher. Near-term, purely from a market perspective, this is a positive for U.S. crop farmers. However, when we consider this commodity price movement is largely being driven because people are dying while fighting to maintain their freedom, it sobers any excitement that would normally come with higher commodity prices. Geopolitical-driven markets are always tricky, and this is one of the bigger geopolitical events that we’ve seen impact our commodity markets in many years. For now, the impact on the Iowa farmland market is mostly positive, as you can see in the sales detailed below. Recognize, however, that such geopolitical situations are always fluid, and prospects can change in unexpected ways.

NORTHWEST

Pocahontas County:

100 +/- acres, located southeast of Laurens, recently sold at public auction for $13,200 per acre. The farm consisted of 100 +/- tillable acres with a CSR2 of 81.9, and equaled $161/CSR2 point on the tillable acres.

NORTH CENTRAL

Worth County:

77 +/- acres, located near Orchard, recently sold at public auction for $9,000 per acre. The farm consisted of 70 +/- tillable acres with a CSR2 of 74.1, and equaled $134/CSR2 point on the tillable acres.

NORTHEAST

Fayette County:

107 +/- acres, located northeast of Wadena, recently sold at public auction for $11,000 per acre. The farm consisted of 103 +/- tillable acres with a CSR2 of 61.6, and equaled $185/CSR2 point on the tillable acres.

WEST CENTRAL

Woodbury County:

79 +/- acres, located northwest of Salix, recently sold at public auction for $16,000 per acre. The farm consisted of 77 +/- tillable acres with a CSR2 of 78.7, and equaled $208/CSR2 point on the tillable acres.

CENTRAL

Dallas County:

116 +/- acres, located west of Adel, recently sold at public auction for $12,700 per acre. The farm consisted of 113 +/- tillable acres with a CSR2 of 75.8, and equaled $172/CSR2 point on the tillable acres.

EAST CENTRAL

Benton County:

126 +/- acres, located west of Walford, recently sold for $16,500 per acre. The farm consisted of 125 +/- tillable acres with a CSR2 of 88.4, and equaled $188/CSR2 point on the tillable acres.

SOUTHWEST

Page County:

153 +/- acres, located east of Shenandoah, recently sold at public auction for $8,950 per acre. The farm consisted of 126 +/- tillable acres with a CSR2 of 68.8, and equaled $157/CSR2 point on the tillable acres. Note: The balance of the farm was in pasture.

SOUTH CENTRAL

Warren County:                                                                                                         

85 +/- acres, located southeast of Carlisle, recently sold at public auction for $14,000 per acre. The farm consisted of 82 +/- tillable acres with a CSR2 of 87.2, and equaled $166/CSR2 point on the tillable acres.

SOUTHEAST

Keokuk County:

80 +/- acres, located southeast of What Cheer, recently sold at online auction for $7,650 per acre. The farm consisted of 69 +/- tillable acres with a CSR2 of 59.1, and equaled $150/CSR2 point on the tillable acres. Note: The balance of the farm was in timber and a pond.

Hertz Real Estate Services compiled this list, but not all sales were handled by Hertz. Call Hertz at 515-382-1500/800-593-5263 or visit www.Hertz.ag.