Greetings! Land auctions in Iowa picked up a little last week. There is still a very limited amount of land offered at auction. Last week, there were a total of 1,372 acres offered at auction. Of those acres, 1,041 were tillable acres. I would describe last week’s auctions results as "stable."
A couple highlights from last week: Four tracts, 349 acres offered, sold at the same auction in Floyd County for $7,025, $5,500, $5,225 and $9,025 per acre with a respective CSR/CSR2 of 75/80, 76/73, 76/73 and 87/90. In Montgomery County, 111 acres sold in for $8,000/acre with a CSR/CSR2 70/72, and 175 acres in Buchanan County, offered in three tracts, sold for $8,500, $8,900 and $9,000 per acre with a respective CSR/CSR2 81/88, 79/86 and 78/86.
There was one “no sale” along the Iowa-Missouri border with cattle facilities, and several acres of pasture. The farm is still for sale.
The headlines you read or watch on TV have been consistent – farmland values have been trending downward for several years. I agree, land values are down from the 2013 peak somewhere between 15-20 percent.
This is a basic function of the market when net income falls. It is my opinion we have seen some price stabilization due to lower-than normal supply of farmland for sale. Values remain higher than they were five to seven years ago. Land will continue to be a positive long-term investment.
Local specifics still can easily override any regional or national trends. A recent auction by Jeff Obrecht, “The Dirt Dealer," is an example of this. The farm sold for more than $2,000/acre over the reserve.
The reality is that farmers and investors alike see farmland as a good long-term investment. Land looks favorable when compared to volatile stock market investments or near-zero returns on CDs.
For this reason, we are seeing auction results that you would not expect based on some of the current commentary and forecasts.
Check back next week as I will be discussing another current topic. The state of Iowa is not coupling with the Federal Government IRS Sec. 179. This is a major issue and a costly one to Iowa farmers. Please check out our January auction results. Please make sure and hit the “like” button on Facebook.
Talk to you soon!
Thanks.
Jim Rothermich
Certified General Appraiser
Peoples Company Appraisal Team
