Heavy snow fell in December. Then, a warm week around Christmas melted all the snow. Next, the bitter cold arrived with gusto in January and lasted most of the month. This weather spell was broken on Groundhog Day, with 20-degree temperatures amid gray skies and no shadows to be had in Iowa. According to tradition, this means spring will arrive early.
It has surely been an up-and-down winter, so it seems an early spring would be welcomed by most! This also has me thinking that the farmland market across Iowa has been more stable than the weather this year.
If anything, the current farmland market could almost be described as boring, as there have not really been many changes in a few months. Commodity prices remain low, pulling slightly lower in January with a bloated supply-side USDA report. But we’ve been operating in this low commodity price environment for a couple of years now.
The supply of land offered to the market remains low, so that also has not changed.
For most sales of medium to higher quality, there is a small handful of local buyers who have an appetite to add to their farming operations. This is accompanied by an investor community that continues to value the long-term fundamentals that farmland offers.
This reality is a big reason why land prices are stable. Mortgage interest rates have been floating in a fairly narrow range for months now, so there’s no apparent game-changer there, either.
I said it last month, and I will say it again: Until something fundamental changes on the supply side of land being offered to the marketplace — such as more land coming for sale or more defined weakness on the demand side, where people stop pursuing additional land for their farming business or investment portfolio — I see the land market continuing to tread water.
Sure, in a market like we’re currently in, there can be a high spike sale here or a weak no-sale there. But with another government payment due to hit bank accounts before spring, it seems farmland values will continue to chop sideways on the economist charts.
Once again, the respectable sales below tell the story:
Lyon County. Southeast of Inwood, ± 103 acres recently sold at public auction for $22,000 per acre. The farm consisted of ± 100 tillable acres with a Corn Suitability Rating index of 69.8, and equaled $325 per CSR2 point on the tillable acres.
Cerro Gordo County. South of Rockwell, ± 160 acres recently sold at public auction for $14,700 per acre. The farm consisted of ± 154 tillable acres with a CSR2 of 82.7, and equaled $185 per CSR2 point on the tillable acres.
Black Hawk County. South of Dunkerton, ± 79 acres recently sold at public auction for $14,400 per acre. The farm consisted of ± 76 tillable acres with a CSR2 of 89.1, and equaled $168 per CSR2 point on the tillable acres.
Calhoun County. Northeast of Lytton, ± 58 acres recently sold at public auction for $13,600 per acre. The farm consisted of ± 58 tillable acres with a CSR2 of 86.4, and equaled $157 per CSR2 point on the tillable acres.
Grundy County. West of Grundy Center, ± 67 acres recently sold via sealed bids for $18,022 per acre. The farm consisted of ± 65 tillable acres with a CSR2 of 93.3, and equaled $199 per CSR2 point on the tillable acres.
Benton County. North of Newhall, ± 147 acres recently sold for $15,250 per acre. The farm consisted of ± 146 tillable acres with a CSR2 of 91.1, and equaled $168 per CSR2 point on the tillable acres.
Mills County. South of Glenwood, ± 302 acres recently sold at timed public auction for $6,350 per acre. The farm consisted of ± 272 tillable acres with an average CSR2 of 69.7, and equaled $101 per CSR2 point on the tillable acres. Note: The balance of acres with this property were in terraces, timber and waste.
Madison County. Northwest of Lorimor, ± 80 acres recently sold at public auction for $8,400 per acre. The farm consisted of ± 76 tillable acres with an average CSR2 of 56.6, and equaled $156 per CSR2 point on the tillable acres.
Henry County. North of Fairfield, ± 75 acres recently sold for $10,450 per acre. The farm consisted of ± 70 tillable acres with a CSR2 of 70.7, and equaled $158 per CSR2 point on the tillable acres.