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Land Investment Monthly - August 2017

August 23, 2017 - Peoples Company

The Land Investment Monthly is a round-up of articles and headlines published by the farm press, business media and financial publications with insights into buying, selling or investing in farmland, recreational ground or development ground.

Nice and Steady

In Iowa, a stabilization in land values could translate into mostly steady cash rents for 2018, per a report by ​DTN/The Progressive Farmer. Several factors lean toward steady cash rents, such as high real estate taxes and fact that “most tenants don't look like they're suffering.” Farmland owner-tenant rules in Iowa require lease change notifications on or before September 1. In areas where yields are good, according to Iowa State University Extension specialist Ryan Drollette, landowners may not be as willing to reduce cash rents. 
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At the Bank

The sentiment around farmland values seems to be slowly turning as the latest survey of bank CEOs in a 10-state Midwest region showed the highest farmland and ranchland-price index since July 2014. On average, bankers anticipate that farmland prices will decline by another 3.5 percent over the next year – an expectation that has been revised upward, compared with this time last year when bank CEOs projected a nearly 7 percent fall. More than 57 percent of bankers have noted that drought conditions were having a negative impact on agriculture production in their area. AgWeb reports. 

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Looking Up

The average acre of farmland in Iowa rose 1.9 percent from a year ago – to $8,000 an acre – returning to the same value posted in 2015. The Associated Press, reporting on the latest agricultural real estate value estimates, notes that Iowa was the only state in the five-state corn belt region, including Illinois, Indiana, Missouri and Ohio, to see an increase in value. The national average is up 2.3 percent to $3,080 an acre as Minnesota, Wisconsin and North Dakota also saw increases this year. 

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Farm Futures 
Demand for non-GMO and organic feed and food is red-hot, but U.S. farmers are slow to convert acres. Farm Futures reports that, despite explosive consumer demand, many Midwest farmers remain wedded to conventional commodity production. The article explores the risk vs. rewards associated with going organic – and the road to profitability. 
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Rocky Mountain High 
Colorado’s Culebra Peak – towering 14,047 feet​ and the reportedly the highest peak in the world—has been sold to a private buyer for $105 million. Known as the 14er, it was purchased as part of an 83,368-acre transaction for Cielo Vista Ranch ranch. Home to thousands of elk, deer, and bighorn sheep, and more than 100 miles of fishable creeks, the property includes 18 peaks over 13,000 feet along 22 miles of the Sangre de Cristo Range ridge line. 
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Digital Connection
DuPont has struck a deal to acquire Granular, Inc., a software and analytics tools provider that helps farms improve efficiency, profitability, and sustainability. The acquisition, Successful Farming reports, will enable DuPont to connect growers, analytics, and public and private data to advance its vision for a digitally connected, more sustainable agriculture industry. Granular serves nearly 2 million acres of commodity and specialty crops across the U.S., Canada, and Australia. The deal is expected to close in Q3 2017.

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Published in: Real Estate