How did your spring season compare with recent years?
You may not have observed the exact same thing in your neck of the woods, but to me, spring planting this year seemed a little more spread out.
We didn’t plant everything in a condensed 10-day window. There were more weather-induced starts and stops, which staggered things. And overall, the season seemed a little less intense.
As a result, we should have a wider corn pollination window this summer. This will spur a likely lead-up to harvest with spaced maturities, instead of every field being ready simultaneously this fall.
I think much the same can be said of the Iowa farmland market. Things seem to be operating pretty smoothly. It’s not perfect, but it’s stable.
As I’ve written across recent months, there are fewer farms for sale right now, compared with a couple years back. And there’s still plenty of demand for, and interest in, those farms that are coming to today’s market.
Farmers continue to make up the majority of buyers, but nonfarming investors also have interest in most farms of quality. This is especially true for nonfarming investors who remain concerned about inflation and the current geopolitical environment.
The timing may be just right for nonfarming investors. One market adjustment that our professionals at Hertz Farm Management have slowly seen reemerge in recent months is discussion around — and interest in — sale-leasebacks.
If a farming operation has tight or tightening finances, some are considering the sale of a piece of farmland to a nonfarming investor with the right to continue farming it. This allows the farmer-seller to tidy up finances with minimal disruption to the scope of their operation.
In some cases, the farmer-seller also can negotiate for the first right to purchase back the farm should the investor want to sell the property in the future.
Sale-leasebacks are not necessarily common. However, in the sale-leasebacks I’ve observed, they’ve been win-win situations.
And, as I’ve talked with farm lenders this spring, this approach to operational recapitalization has strong merit, especially for those who have seen working capital erode more than they would like over the past two to three years.
In comparison with working capital levels, the Iowa farmland market continues to provide ongoing strength and stability, as reflected in the sales below:
Cherokee County. Southwest of Cherokee, ± 116 acres recently sold at public auction for $14,100 per acre. The farm consisted of ± 107 tillable acres with a Corn Suitability Rating index of 83.0, and equaled $184 per CSR2 point on the tillable acres.
Butler County. West of Shell Rock, ± 76 acres recently sold at public auction for $19,000 per acre. The farm consisted of ± 74 tillable acres with a CSR2 of 87.8, and equaled $222 per CSR2 point on the tillable acres.
Buchanan County. East of Quasqueton, ± 39 acres recently sold at public auction for $16,200 per acre. The farm consisted of ± 38 tillable acres with a CSR2 of 82.6, and equaled $201 per CSR2 point on the tillable acres.
Sac County. West of Sac City, ± 97 acres recently sold at public auction for $13,600 per acre. The farm consisted of ± 86 tillable acres with a CSR2 of 85.0, and equaled $181 per CSR2 point on the tillable acres.
Hardin County. Northeast of New Providence, ± 60 acres recently sold at public auction for $13,500 per acre. The farm consisted of ± 57 cropland acres with a CSR2 of 87.2, and equaled $163 per CSR2 point on the cropland acres.
Linn County. North of Central City, ± 158 acres recently sold for $11,600 per acre. The farm consisted of ± 138 tillable acres with a CSR2 of 71.6, and equaled $186 per CSR2 point on the tillable acres. Note: The nontillable acres comprised waterways, timber and a small creek.
Pottawattamie County. East of McClelland, ± 111 acres recently sold for $8,000 per acre. The farm consisted of ± 100 tillable acres with an average CSR2 of 58.6, and equaled $152 per CSR2 point on the tillable acres. Note: The nontillable acres comprised terraces and timber.
Madison County. South of Winterset, ± 149 acres recently sold at public auction for $9,500 per acre. The mixed-use farm consisted of ± 94 tillable acres with an average CSR2 of 77.2, along with ± 31 acres enrolled in the Conservation Reserve Program that paid $143 per enrolled acre, and ± 24 acres of timbered draws and waste.
Louisa County. Northeast of Winfield, ± 79 acres recently sold at public auction for $21,050 per acre. The farm consisted of ± 79 tillable acres with a CSR2 of 88.4, and equaled $238 per CSR2 point on the tillable acres.