Iowa Farmland Report and Auction Results October 8, 2021

$26,000 Farmland Sale Result in Johnson County, Iowa!

Nobody is in charge of tracking Iowa’s farmland price record and certainly no true defintion exists but some may recall years ago I suggested a record price should only be considered on farms where no additional income exists such as wind tubines, cell towers or addtional leases to the crop production PLUS be at least 10 miles from any development or large city boundary.  I think that adds an element of fairness to the term “farmland price record” for several reasons.  That said, everybody is referring to it as the new Iowa Record Farmland price and I won’t disagree, but I’ll offer a fair review of the  facts about the farm.  First, the price anomalies that may have been influenced by something OTHER THAN crop production can often give potential sellers a false sense of value and the farmland sales ecosystem and at the same time, we owe farmers and those that use farmland the fairness of not artificially inflating the value of land all across the state with an outlier.  Certainly I believe every seller should maximize the value of their land to its best and highest price but I also believe they should be properly armed with real facts, and thats very important if you embark on your Sellers Journey.  

So lets take a look at this farm.  There are two parcels of both near 76 acres each.  There are two prices, the southern parcel sold for $26,000 per acre while the northern parcel sold for $21,000 per acre.  Hertz Farm Management did a great job marketing and selling the farm so I dont want my commentary to take away from that.  And on top of that it was a GREAT farm with CSR ratings in the 93.1-93.7 range.  You can’t take anything away from it, it’s a top quality farm!  That said, as the old adage goes “Location, location, location” and this was an obvious case of location, not necessarily luck or true demand.  When you zoom out on the map its easy to see why investors would be interested in this farm in a way they wouldn’t be interested in a farm where its only possible use is agricultural production.  Its immediately south of Cedar Rapids, only 1/2 mile south of the city limits.  Its located in one of the fastest population growth areas in Iowa, right in the center of it!  Only 1 mile south of the Cedar Rapids airport and partially inside the Swisher city limits.  6.8 miles south of the farm you begin to run into the Iowa City metro area.  New housing development exists only 1100 feet to the west.   There is gravel access to the northern parcel which is more difficult to reach than the southern parcel which sold for $26,000 which is on hard surface County Road F-12. In all fairness, this farm was located in a pretty desirable area for investors where population continues to grow.  Move this farm 5 miles east or west and it just was not likely to achieve this price.  The farm is likely in the future, if not now to have a highest and best use other than tillable farmland.  Its not unusual for farms in this position to sell for high prices.  Look at some of the deals on the western side of Des Moines or other Metro areas where development pushes toward farmland and prices for some of those well positioned farms can run into the $50,000 and $60,000 per acre range as a development becomes imminent.  Many of them are sold as private deals with confidentiality agreements and can be difficult to track.  As those tracts get developed and broken down smaller and smaller its not uncommon for them to be sold in square feet eventually as infrastructure is put in place and anchors begin to bring traffic to the area.

Land Auction Results Crawford County Iowa

It was an honor for DreamDirt to represent the Krueger Family Farmland at auction in Crawford County, Iowa.   We worked with the family for about 8 weeks setting up their farmland auction and in the end the auction delivered a top of the market price.  The neighborhood their farm was located in was hungry for a farmland sale. We had very strong interest in this farm which generated $13,075 per acre.  That sale price equates to $192 per CSR2 point.  To put that in perspective that is just $15 per point off the highest farmland sale in Iowa from the previous week on a 20 point higher quality farm.  West central Iowa has seen fewer farmland sales than many of the other crop reporting districts and demand runs very high in Crawford, Ida, Sac and Carroll Counties. I think it will take significant sales volume to satiate it and beyond what we are likely to see this year.