August 2024 Wallace’s Farmer MarketPlace Extra

The Latest on Land Values

The farmland market across Iowa (and the Midwest) is resilient. As we’ve watched the grain markets grind lower nearly all year – to below breakeven levels – we have not yet seen land prices retreat in a similar way. Certainly, land sales are not making new highs. But sale after sale in the early summer months has reminded us how valuable the opportunity to own the farm next door is. What is it about farmland that makes it so sought after? Three simple reasons come to my mind.

First, land is agriculture’s most fundamental input. Every farmer I know aspires to own land (and buy more). I know many landowners who have patiently positioned themselves for decades to make a move when a specific farm becomes available. For some, the timing really doesn’t matter – they will be ready when the opportunity presents itself, regardless of other factors.

Second, land buyers make decisions with a long-term lens that somewhat mutes the effect of grain market volatility. Yes, the price of corn in early July is below the cost of production; but we all know that the entirety of last year’s production isn’t being sold at these price levels. So, what we see today in the grain markets does not tell the entire story.

Lastly, if an opportunity to buy the right farm surfaces, many land buyers can easily shift from and sacrifice other capital expenditures. I’ve often shared that it’s easy to delay a tractor or combine upgrade until later, if the right farm acquisition is available. It’s a simple matter of capital priorities.

Yes, a weak grain market with high interest rates, can eventually lead to a noticeable leak in land values. But as the following sales reflect, strength remains common in the Iowa land market.

NORTHWEST

Pocahontas County:

76 +/- acres, located north of Palmer, recently sold at public auction for $12,500 per acre. The farm consisted of 74 +/- tillable acres with a CSR2 of 83.9, and equaled $153/CSR2 point on the tillable acres. Note: This farm was under lease for 2024 and the buyer was to receive a $150/tillable acre rent credit at closing.

NORTH CENTRAL

Cerro Gordo County:

160 +/- acres, located near Sheffield, recently sold at public auction for $12,100 per acre. The farm consisted of 155 +/- tillable acres with a CSR2 of 80.3, and equaled $155/CSR2 point on the tillable acres.

NORTHEAST

Clayton County:

158 +/- acres, located southeast of Millville, recently sold for $5,500 per acre. The farm consisted of 42 +/- CRP acres with a $190/acre annual payment (expires in 2030), while the balance of the land was rolling timber.

WEST CENTRAL

Guthrie County:

151 +/- acres, located east of Audubon, recently sold at public auction for $13,600 per acre. The farm consisted of 134 +/- tillable acres with a CSR2 of 74.1, and equaled $207/CSR2 point on the tillable acres.

CENTRAL

Story County:

80 +/- acres, located south of Roland, recently sold for $11,300 per acre. The farm consisted of 78 +/- tillable acres with a CSR2 of 76.6, and equaled $151/CSR2 point on the tillable acres.

EAST CENTRAL

Jackson County:

68 +/- acres, located north of Spragueville, recently sold for $8,200 per acre. The farm consisted of 63 +/- tillable acres with a CSR2 of 46.5, and equaled $190/CSR2 point on the tillable acres.

SOUTHWEST

Fremont County:

74 +/- acres, located near Riverton, recently sold at public auction for $8,400 per acre. The farm consisted of 64 +/- tillable acres with a CSR2 of 78.6, and equaled $123/CSR2 point on the tillable acres.

SOUTH CENTRAL

Warren County:

102 +/- acres, located south of Carlisle, recently sold for $7,300 per acre. The farm consisted of 76 +/- tillable acres with a CSR2 of 68.4, and equaled $143/CSR2 point on the tillable acres. Note: The balance of this Middle River bottom farm was timber and waterways.

SOUTHEAST

Des Moines County:

91 +/- acres, located west of Danville, recently sold at public auction for $16,525 per acre. The farm consisted of 91 +/- tillable acres with a CSR2 of 83.0, and equaled $199/CSR2 point on the tillable acres.

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

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