August 2018 Wallace’s Farmer “MarketPlace Extra”

It has been incredible to observe both historic flooding and moderate drought within just a few counties of each other.  Fortunately, on average, the corn and soybean crops continue to develop; and with corn pollination now nearly complete, another harvest season will soon be upon us.  As we approach harvest, and as the farmland marketplace gears up for the traditional beginning of the fall-winter selling season, the overall market remains stable.  However, because of localized differences in growing season success, don’t be surprised if local influences perhaps play a slightly larger role in sale results across the farmland market this fall.  High quality farms with the most productive soils, solid drainage, easy farm-ability, and strong fertility will continue to sell best.  And farmers are likely to remain the most prevalent group of buyers, even though many non-farming investors are active across Iowa.  Again, it should not come as a surprise if there is a slight increase in unevenness of sale results for similar quality farms that are located in different areas, as local factors may be playing an increasing role in our market in the coming months.

As we move into fall, the following topics remain in focus when analyzing the farmland market as a whole.  First, as mentioned above, the success (or lack thereof) in our current growing season will help establish the ‘mood in the countryside’ this fall. In some areas where another big crop is harvested, land values are likely to see continued strength, while other areas that have experienced a poor growing season are likely to experience localized pressure on the land market.  Second, increasing interest rates will continue to pressure farmland values.  The Federal Reserve has raised short-term rates more than a half-dozen times in the past 18 months. While short-term rates don’t directly impact long-term borrowing costs, short-term rates that banks charge for operating notes are increasingly being impacted by the Fed’s move to higher rates, which, in turn, is impacting farm level profitability.  Third, the tariff threat has now become reality and, as a result, has impacted the soybean market directly (e.g., China), and has indirectly impacted the corn market.  How the trade ‘dance’ plays out in the days and months ahead will likely continue to serve as another driver to commodity prices and, ultimately, on underlying asset values, including farmland.  Finally, with all the other market motion, there’s been little attention given to the negotiations currently occurring in Congress that relate to the new Farm Bill, when in fact both the House and Senate have been proposing various adjustments to farm policy that will impact future years. This topic will very likely impact growers and farmland values.  Stay tuned for further analysis as new information surfaces on all these topics.

NORTHWEST
Buena Vista County: 

79 +/- acres, located southeast of Newell, recently sold at public auction for $8,300 per acre. The farm consisted of 79 +/- tillable acres with a CSR2 of 83.4, and equaled $99/CSR2 point on the tillable acres.

NORTH CENTRAL
Butler County:

94 +/- acres recently sold at public auction for $6,600 per acre. The farm consisted of 91.5 +/- tillable acres with a CSR2 of 70.4. The sale equaled $96/CSR2 point on the tillable acres.

NORTHEAST
Delaware County:

115 +/- acres, located north of Greeley, recently sold for $8,076 per acre. The farm consisted of 115 +/- tillable acres with a CSR2 of 60.1, and the sale equaled $134/CSR2 point on the tillable acres. The buyer was a local investor.

WEST CENTRAL
Guthrie County:

80 +/- acres, located in Richland Township, recently sold for $7,950 per acre. The farm consisted of 66 +/- tillable acres with a CSR2 of 62.9.  The sale equaled $153/CSR2 point on the tillable acres.

CENTRAL
Hamilton County:

147 +/- acres, located in Williams Township, recently sold for $9,100 per acre.  The farm consisted of 143.6 +/- tillable acres with a CSR2 of 83.8.  The sale equaled $111/CSR2 point on the tillable acres.

EAST CENTRAL
Linn County:

155 +/- acres, located east of Springville, recently sold at public auction for $10,200 per acre. The farm consisted of 149.5 +/- tillable acres with a CSR2 of 79.9.  The sale equaled $132/CSR2 point on the tillable acres.

SOUTHWEST
Fremont County:

224 +/- acres, located east of Sidney, recently sold for $5,357 per acre. The river bottom farm consisted of 222 +/- tillable acres with a CSR2 of 80.6. The sale equaled $67/CSR2 point on the tillable acres.

SOUTH CENTRAL
Appanooese County:

46 +/- acres, located east of Cincinnati, recently sold at public auction for $2,625 per acre. The land has been planted to alfalfa hay and included a 1+/- acre stocked pond.  The property featured a CSR2 rating of 33.6 on the entire farm.   

SOUTHEAST
Henry County:

80 +/- acres, located north of Trenton, recently sold for $6,475 per acre. The farm had 66+/- tillable acres with a CSR2 of 66.4; the balance of the acres included timber and a pond. The sale equaled $118/CSR2 point on the tillable acres.

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.

Posted By Hertz Farm Management on August 8, 2018