February 2023 Wallace’s Farmer “MarketPlace Extra”

When people think back to previous decades in agriculture, there are often themes that come to mind.  For example, back in the 1970’s, it was expansion and fencerow-to-fencerow agriculture.  In the 1980’s, we now think back on high inflation, even higher interest rates, and a very painful financial reset to American agriculture. Moving forward and looking back in today’s rearview mirror, the 1990’s now seem like a somewhat quiet recovery decade, with free markets and global trade both playing significant roles. On to the 2000’s, and a turn towards a new demand source with the biofuels boom brought on by the Renewable Fuels Standard. Through the 2010’s, we now look back to see commodity demand continuing to build, a drought-inspired commodity price spike, and a prior peak in 2013 for farmland values that few thought possible – but also, a latter half of the decade that involved treading water in most corners of the ag industry. So, as we consider the 2020’s thus far, what themes may have lasting legs?

For the first 3 years of the current decade, I would suggest low interest rates, high commodity prices, and an incredible appreciation in land values, as the main themes thus far. Will these themes hold through decade-end and into the future? Maybe, but uber-low interest rates have already moved higher here in early 2023.  We do continue to enjoy historically high commodity prices, and that reality supports farm profitability, at least in the near-term. And with a generally healthy and profitable farm sector, current farmland value levels should stabilize. The common question people are asking me is whether land values will continue to appreciate? And my answer – perhaps marginally, but I suspect the 2020-2022 annual asset appreciation rates of 10-30% are now over. Does that mean land values will weaken and subsequently back up?  Not necessarily.  And as the sales below indicate, there’s still plenty of dry powder when the right farm comes for sale.

NORTHWEST

Pocahontas County:

79 +/- acres, located northeast of Rolfe, recently sold at public auction for $16,400 per acre. The farm consisted of 74 +/- tillable acres with a CSR2 of 85.2, and equaled $205/CSR2 point on the tillable acres.

NORTH CENTRAL

Floyd County:

103 +/- acres, located southeast of Nora Springs, recently sold at public auction for $14,800 per acre. The farm consisted of 99 +/- tillable acres with a CSR2 of 95.7, and equaled $161/CSR2 point on the tillable acres.

NORTHEAST

Black Hawk County:

60 +/- acres, located east of Dunkerton, recently sold for $7,666 per acre. The farm consisted of 59 +/- tillable acres with a CSR2 of 69.9, and equaled $111/CSR2 point on the tillable acres. Note: 14 +/- acres of the tillable land were enrolled in CRP.

WEST CENTRAL

Greene County:

120 +/- acres, located east of Rippey, recently sold at public auction for $16,500 per acre. The farm consisted of 117 +/- tillable acres with a CSR2 of 87.3, and equaled $193/CSR2 point on the tillable acres.

CENTRAL

Boone County:

80 +/- acres, located northeast of Boone, recently sold at public auction for $14,000 per acre. The farm consisted of 78 +/- tillable acres with a CSR2 of 85.2, and equaled $168/CSR2 point on the tillable acres.

EAST CENTRAL

Benton County:

76 +/- acres, located north of Keystone, recently sold at public auction for $21,300 per acre. The farm consisted of 77 +/- tillable acres with a CSR2 of 94.8, and equaled $221/CSR2 point on the tillable acres.

SOUTHWEST

Fremont County:

303 +/- acres, located northwest of Hamburg, recently sold at public auction for $7,000 per acre. The farm consisted of 283 +/- tillable acres with a CSR2 of 73.6, and equaled $101/CSR2 point on the tillable acres.

SOUTH CENTRAL

Ringgold County:

156 +/- acres, located southeast of Mt. Ayr, recently sold at public auction for $5,300 per acre. The farm consisted of 126 +/- tillable acres with a CSR2 of 47.0, and equaled $139/CSR2 point on the tillable acres.

SOUTHEAST

Mahaska County:

46 +/- acres, located along the north edge of Oskaloosa, recently sold via online auction for $15,800 per acre. The farm consisted of 44 +/- tillable acres with a CSR2 of 77.5, and equaled $213/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. 

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