I love this time of year, and I’d bet you do, too. Harvest is the payoff period for so many of our efforts across recent months (and years).
As harvest approaches this year, I was half nervous and half excited to see how crop totals will compare to preharvest estimates.
And because I work every day at Hertz Farm Management in the land business, I also have been unusually expectant of something different in the land market this year.
For whatever reason, all the “motion” in the world has had me believing that we were approaching a turn of some sort. Why? I think it’s because there have been so many things happening simultaneously.
Let’s take quick inventory of the following five factors:
1. Corn and soybeans. It seems in Iowa we’ve grown a respectable, though not a record, corn and soybean crop. In general, it’s a positive to have the bushels.
2. China. China returned to the commodity table, buying large quantities of our soybeans. That also is a positive.
3. Weather. The strongest El Nino of record has been organizing in the Pacific and is beginning to impact our weather (and South America's). This is another seemingly positive aspect for our market positioning.
4. Drought. Europe has been suffering through a historic drought this year, effectively cutting production of everything grown there. It’s bad for them, but again, good for our market positioning.
5. War. Finally, Russia and Ukraine are now in year five of brutalizing each other, killing tens of thousands, and destroying both of their productive abilities and export capacities. This is awful, and it is drawing the world wheat market higher and dragging corn and soybeans along for the ride.
Other issues
As I reflect on each of these market realities, I struggle to recall a time in my life when there have been so many concurrent worldwide issues. I have not even mentioned the war with Iran, the resulting disruptions across the Middle East or our own farm policies — each of which impacts demand.
As a result of all this motion, we wrapped the month of August with three-year highs in both the corn and soybean markets. This grain market movement has put on-farm profitability back into play.
Profits on the farm, as they typically do, are likely to create an uptick in demand for available land assets. I’ve also mentioned in this column that I thought we were going to see a bigger flush of land sales in the market this fall (e.g., more supply). So far, that also is occurring.
So, what does this movement in both demand and supply mean for land prices? Depending on the neighborhood, it may initially look uneven.
But the sales below reflect a pretty healthy market across Iowa:
Emmet County. Southwest of Armstrong, ± 153 acres recently sold at public auction for $14,800 per acre. The farm consisted of ± 144 tillable acres with a Corn Suitability Rating index of 84.2, and equaled $187 per CSR2 point on the tillable acres.
Hancock County. Southwest of Klemme, ± 83 acres recently sold at public auction for $14,200 per acre. The farm consisted of ± 82 tillable acres with a CSR2 of 87.8, and equaled $164 per CSR2 point on the tillable acres.
Black Hawk County. South of Washburn, ± 109 acres recently sold at public auction for $15,275 per acre. The farm consisted of ± 107 tillable acres with a CSR2 of 89.8, and equaled $173 per CSR2 point on the tillable acres.
Crawford County. Northeast of Vail, ± 232 acres recently sold at public auction for $11,600 per acre. The farm consisted of ± 222 tillable acres with a CSR2 of 68.0, and equaled $178 per CSR2 point on the tillable acres.
Webster County. Northeast of Badger, ± 114 acres recently sold at public auction for $13,500 per acre. The farm consisted of ± 114 cropland acres with a CSR2 of 83.7, and equaled $161 per CSR2 point on the cropland acres.
Cedar County. Northeast of Tipton, ± 80 acres recently sold for $17,000 per acre. The farm consisted of ± 80 tillable acres with a CSR2 of 93.9, and equaled $181 per CSR2 point on the tillable acres. Note: This farm only has access via a ¼-mile easement.
Montgomery County. North of Shenandoah, ± 116 acres recently sold at public auction for $10,800 per acre. The farm consisted of ± 108 tillable acres with an average CSR2 of 76.3, and equaled $152 per CSR2 point on the tillable acres. Note: This farm included an older machine shed and older grain bins.
Decatur County. South of Van Wert, ± 75 acres recently sold for $11,100 per acre. The farm consisted of ± 71 tillable acres with an average CSR2 of 67.1, and equaled $175 per CSR2 point on the tillable acres.
Jefferson County. South of Fairfield, ± 74 acres recently sold at public auction for $11,400 per acre. The farm consisted of ± 73 tillable acres with a CSR2 of 65.1, and equaled $177 per CSR2 point on the tillable acres.