Survey shows 23.7% jump
Iowa farmland continues to rise in value. Neighboring farmers and landowners are the strongest buyers, with investors also buying farms. The Iowa Chapter of the Realtors Land Institute released its March farmland value survey results. It shows an average increase of 10.8% in farmland values compared to six months ago. Combined with the September 2011 survey results, this computes to a one-year average increase in Iowa farmland values of 23.7%.
The highest-priced sales occur when multiple, well-capitalized neighboring farmers want to buy the same piece of land being sold at auction. High farm income, low interest rates, uncertainty in government policy and poorly performing alternative investments are driving farmland prices higher. Some landowners wish to sell before capital gains taxes increase next year. Estates and multiple owner properties, where one or more owners wish to cash out, comprise the majority of sellers.
O’Brien County: Near Sanborn, 9.44 unimproved acres sold at public auction for $12,700 per acre. The land has a CSR of 74.5 and was sold to a farmer from an estate.
Cerro Gordo County: Recently, 182 acres sold at public auction in two parcels. The 114.83-acre and 67.26-acre tracts sold for $9,100 and $10,500 per gross acre, respectively. The parcels have 110.2 and 60.7 crop acres. With CSRs of 74.8 and 71.7, the farms sold to adjoining farmers.
Delaware County: A sale of 118 acres was made at public auction for $1,191,800, or $10,100 per acre. The farm has an average CSR of 77.4 and 113.1 crop acres, and included a machine shed. The sale was from an estate to a farmer, and is part of a multi-parcel 594-acre public auction.
Audubon County: At auction, 116 acres sold for $5,500 per acre. The farm has 101 acres of cropland with a 56.4 CSR . The rest of the land is roads and waste. The buyers are area farmers.
Hamilton County: Northwest of Jewell, 114 acres sold at public auction in two parcels for $11,000 per gross acre, or a total of $1,254,200 — which is $11,330 per crop acre. The property has an average CSR of 75.5 and includes 110.7 non-HEL crop acres. This works out to $150 per CSR point per tillable acre. Seller is an estate, and the buyers are neighboring farmers.
Cedar County: Northeast of Clarence, 148 acres sold at public auction. The farm has 143 tillable acres with an average CSR of 88.5, which is highly productive land. It sold for $1,672,400, or $11,300 per acre.
Taylor County: A 175-acre farm near New Market sold at auction for $5,375 per acre. It is tiled and terraced, and has a CSR of 54. Buyer is a farmer.
Warren County: East of Indianola, 130 acres sold for $4,600 per acre. The farm is a 90% tillable rolling tract, has a CSR of 56.3 and sold to a local investor.
Keokuk County: Northeast of Harper, 80 acres sold at public auction. The farm has 79.9 tillable acres with an average CSR of 69.5, which includes 4.4 acres of CRP waterways. The property sold for $752,000, or $9,400 per acre.
Hertz Real Estate Services compiled this list, but not all sales were handled by Hertz. Call Hertz at 515-382-1500 or visit www.hfmgt.com.
This article published in the April, 2012 edition of WALLACES FARMER.