Does it seem like the world is spinning faster than normal right now? Wars in the Middle East. Deposed dictators. Wild stock market swings. Social media hysterics. Artificial intelligence.
If allowed, the 24-hour news cycle can steal your peace.
In comparison, as I’ve written about for several months, the current farmland market is relatively stable. It’s almost boring. We’ve been operating in a tight, no-margin environment for a couple of years now, and the Iowa farmland market is holding together.
The seeming equilibrium of farmland supply and demand is a major reason why.
Yes, there are fewer buyers in today’s land market than there were from 2021 to 2023. But the supply of land being offered to the market also is down 30% to 50%, depending on the neighborhood, when compared to those go-go years.
So, in the current land market, there are enough buyers to compete for what is being offered at stable price levels.
Why would buyers continue to pursue an asset in a struggling industry like production agriculture? Time and again, a handful of common themes come up when I ask people why they want to buy more land:
- Farmland has outperformed most other assets in the long term, with less volatility.
- Farmland is a hedge against inflation.
- Farmland is weakly correlated with stock performance, making it an excellent portfolio diversifier for investors.
- Farmland is a hard asset that won’t disappear in scandal.
- Farmland often offers more than just financial benefits, including hunting, recreation and family relationships, to name a few.
There are others. The strong sales below remind me just how much Iowa farmland buyers believe in their reasons, because they continue to put their money where their mouth is:
Clay County. South of Dickens, ± 75 acres recently sold at public auction for $15,600 per acre. The farm consisted of ± 75 tillable acres with a Corn Suitability Rating index of 94.8, and equaled $165 per CSR2 point on the tillable acres.
Hancock County. West of Britt, ± 53 acres recently sold at public auction for $18,500 per acre. The farm consisted of ± 52 tillable acres with a CSR2 of 79.5, and equaled $237 per CSR2 point on the tillable acres.
Allamakee County. Southwest of Waukon, ± 148 acres recently sold at public auction for $15,400 per acre. The farm consisted of ± 139 tillable acres with a CSR2 of 86.9, and equaled $189 per CSR2 point on the tillable acres.
Greene County. Southwest of Grand Junction, ± 64 acres recently sold at public auction for $14,500 per acre. The farm consisted of ± 62 tillable acres with a CSR2 of 78.7, and equaled $190 per CSR2 point on the tillable acres.
Hamilton County. Northeast of Stanhope, ± 120 acres recently sold at public auction for $11,100 per acre. The farm consisted of ± 100 cropland acres with a CSR2 of 71.1, and equaled $187 per CSR2 point on the cropland acres. Note: The farm also included ± 17 acres in Conservation Reserve Program land worth $300 per enrolled acre.
Cedar County. Northeast of Tipton, ± 73 acres recently sold for $16,350 per acre. The farm consisted of ± 72 tillable acres with a CSR2 of 87.7, and equaled $189 per CSR2 point on the tillable acres.
Adams County. North of Prescott, ± 120 acres recently sold at public auction for $8,400 per acre. The farm consisted of ± 103 tillable acres with an average CSR2 of 68.5, and equaled $143 per CSR2 point on the tillable acres.
Ringgold County. South of Kellerton, ± 65 acres recently sold at public auction for $7,400 per acre. The farm consisted of ± 62 tillable acres with an average CSR2 of 48.9, and equaled $159 per CSR2 point on the tillable acres.
Henry County. South of Mt. Pleasant, ± 40 acres recently sold for $8,500 per acre. The farm consisted of ± 36 tillable acres with a CSR2 of 52.8, and equaled $179 per CSR2 point on the tillable acres. Note: The tillable acres on this property recently transitioned out of CRP.