December 2024 Wallace’s Farmer MarketPlace Extra

December 2024 Land Values

As we approach the close of another calendar year, it’s always interesting to look back 12 months. Grain prices were much higher last December, but, last year’s harvest yields were weaker in many Iowa regions. Which year was better?

On the interest rate front, the Fed cut short-term interest rates earlier this fall by one-half percentage point. That was good, right? Well, long-term mortgage rates here in early November are actually higher than they were on January 1st. It seems the uncertainty of this fall’s election cycle, combined with the insane amount of government borrowing and spending, has the bond market pricing risk differently than a year-ago. Finally, I think most farm-related businesses started the year with hopeful expectations that 2024 could be a profitable year, although perhaps not at the same level as recent years. By and large, I would say we outperformed the economic stress that descended on 2024, but only because of big bushels this fall.

So, we close the year thankful for the strong growing season in 2024, and we now look ahead to 2025 with clear-eyed profitability concerns. Commodity prices are at or below breakeven for most operations, and some input prices are higher again for the coming crop. The building concern has spilled slightly into the land market, with a year-over-year pull-back in land values for the first time in several years.

However, I would not describe the current land market as weak, as you can see from several sales below. It’s just a different market than a year ago, and finances are tighter for most prospective buyers. This reality makes big decisions even more important to get right, and therefore, folks are ever more cautious. It will be interesting to look back on this article in another 12 months.

NORTHWEST

Sioux County:

Located north of Sioux Center, 75 +/- acres recently sold at public auction for $23,400 per acre. The farm consisted of 74 +/- tillable acres with a CSR2 (Corn Suitability Rating index) of 97.5, and equaled $243 per CSR2 point on the tillable acres.

NORTH CENTRAL

Cerro Gordo County:

Located southeast of Fertile, 80 +/- acres recently sold at public auction for $8,225 per acre. The farm consisted of 76 +/- tillable acres with a CSR2 of 70.6, and equaled $122 per CSR2 point on the tillable acres.

NORTHEAST

Buchanan County:

Located south of Masonville, 95 +/- acres recently sold at public auction for $14,400 per acre. The farm consisted of 94 +/- tillable acres with a CSR2 of 87.0, and equaled $167 per CSR2 point on the tillable acres.

WEST CENTRAL

Crawford County:

Located southeast of Vail, 156 +/- acres recently sold at public auction for $13,800 per acre. The farm consisted of 150 +/- tillable acres with a CSR2 of 79.4, and equaled $181 per CSR2 point on the tillable acres.

CENTRAL

Dallas County:

Located southwest of Perry, 120 +/- acres recently sold for $12,800 per acre. The farm consisted of 115 +/- tillable acres with a CSR2 of 85.8, and equaled $156 per CSR2 point on the tillable acres.

EAST CENTRAL

Iowa County:

Located north of West Amana, 98 +/- acres recently sold for $6,000 per acre. The combination farm consisted of 40 +/- tillable acres with a CSR2 of 36.3, while the balance of the farm was rolling timber and pasture.

SOUTHWEST

Adams County:

Located near Corning, 115 +/- acres recently sold at public auction for $10,100 per acre. The farm consisted of 114 +/- tillable acres with a CSR2 of 81.0, and equaled $126 per CSR2 point on the tillable acres.

SOUTH CENTRAL

Madison County:

Located northwest of Winterset, 103 +/- acres recently sold at public auction for $16,500 per acre. The farm consisted of 99 +/- tillable acres with a CSR2 of 83.2, and equaled $206 per CSR2 point on the tillable acres.

SOUTHEAST

Keokuk County:

Located west of Wellman, 141 +/- acres recently sold at public auction for $14,700 per acre. The farm consisted of 134 +/- tillable acres with a CSR2 of 79.0, and equaled $196 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.  Call Hertz at 800-593-5263 or visit hertz.ag.

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