Iowa’s Weekly Farmland Sales Report Sept 24th

Sep 27, 2021 | Farmland Prices, Iowa Farmland Prices, Iowa Farmland Report, Iowa Land Auction Company, Land Auctions

Jason Smith

Jason Smith

Auctioneer, Land Broker, Appraiser

Jason is a farm real esate processional in Iowa licensed as a broker and auctioneer.  The Iowa Farmland Prices Report is an aggregation of farmland sales across the entire state of Iowa.  DreamDirt has offices in Mason City, Des Moines, Onawa and Storm Lake.

Email: jason@dreamdirt.com | Phone: (515) 537-6633

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Welcome back for another week of farmland sales in Iowa!  The week stayed busy with lots of new farms coming on the market, and all of them selling at great prices.  Land auctions around the state continued to set higher numbers and dollars per CSR point continue to remain strong especially on moderate quality farms.  Read the full Iowa Farmland Prices Report below.

Understanding Iowa’s CSR Ratings on Land

Every farm in Iowa has a CSR rating.  Technically today its a CSR2 rating but we often just refer to it as a CSR rating.  There is CSR1 and CSR2.  Around 2011, Iowa State University undertook updating the original CSR system and when it was launched, version two was referred to as CSR2.  CSR stands for Corn Suitability Rating.  It is absolutely perfect for only 1 thing.  It determines taxation on a farm.  Farms are taxed based on quality and this is exactly what it was established for in 1971.  Each farm has a CSR score that varies from 0 to 100.  0 and 100 are both rare if not non existent.  Numbers in the 60’s are more common than any other.  Low quality farms range from 0-33.  Moderate quality farms 34-66 and high quality farms 67 to 100.  CSR is a reference to a farms ability to be intensely farmed over a long period of time.  In short, CSR refers to a farms durability not its fertility.  This is something that is largely mistaken, even by farmers.  As time went on we could the CSR rating of a farm really could help us understand the value of a farm by referring to a farms value in dollars per CSR point.  Its an extremely simple formula Price per acre divided by CSR = Dollars per CSR point.  For example $8,000 per acre divided by 80 CSR equals $100 per CSR point.  You can then use that outcome to determine the value of another unpriced farm by using $100 per CSR point times the other farms CSR, say 90 and in this case you can see the other unpriced farm is probably worth around $9,000 per care.  Dollars per CSR point are a guide, a view of the past, a view of past averages and the current trend.  When you look at a period of time you can see the trend of values.  That said, in the end to an individual sale it does not dictate price.  Buyers may use it as a guide but it does not stop your farm from selling for more or less.
iowa map

New Land Auction Listing in Monona County

We just listed this farm for the Bergman Family in Monona County!  This 130 acre farm is a whitetail hunters dream!  Its an absolutely beautiful farm in the Loess Hills.  The farm also have 52 tillable acres that generate income annually through cash rents and the tillable soils have a CSR2 rating of 80.7 which is really incredible in the hills!  The primary soil on this farm is Napier Silt Loam which is a very durable soil and very capable of growing an excellent crop.  Whether you use those acres for cash rent or deer hunting food plots I bet you will enjoy having such a high quality soil to grow in.  This farm will sell on October 27th with bidding ending at 2PM.  If you want to view the property view the drone video on in our DreamDirt Marketplace or call to make an appointment to walk the farm.

aerial view farm
heat map of Iowa Farmland sales

Iowa Land Prices at A Glance

Our Iowa Farmland Price Heatmaps have been a huge help for people that want to visiuliaze and research farmland prices in Iowa.  Here you can research your farm’s proximity or the statewide market and see individual sale results, average prices per acre, average price per CSR2 point as well as volumes of sales and the number of acres sold.  Use this market price research tool right here at DreamDirt.  Click the Iowa map to get started.

Iowa Farmland Sales News This Week

The word of the week, Volume!  Specifically, sales volume.  The number of farms coming on the market is really increasing.  Its not hard to understand that as farmland prices rise across Iowa it will tempt many hold outs to finally go to market with their farm.   The period prior to 2021, when we spent a lot of time in a for the most part plateau of land prices for nearly a 5 year period wasn’t all that exciting to some.  With good prices comes comfort and guarantee for sellers entering the market during this period and as you can imagine, there are plenty that desire that “guarantee” of safety when selling their farmland and the extra money is a nice bonus too.  I took a photo of our Farmland Sales Volume Index with trend line.  Its not hard to see that volume is starting to skyrocket as of our last calculation on September 1.  As we add the numbers to the next report I’m confident that number will continue to climb.  What happens when too much volume hits the market?  Well, demand is satisfied and prices moderate, we move back to the middle.  It will only take about 5-6 months before we start to feel that moderation in prices.  Remember when I wrote back in May that 2021 was going to be like 2011?  It won’t last long so if you are selling land, right now is as good of time you are going to find to give you the best outcome and most comfort.
farmland sales graph

This Weeks Farmland Sales by County in Iowa

County Acres Price CSR2 $/CSR2
Washington County 87.1 $10,000 71.6 139.66
Washington County 52.97 $7,400 55.1 134.30
Buchanan County 152.43 $9,700 71.8
135.09
Harrison County 160 $9,800 63.5 171.73
Harrison County 159.5 $8,500 62.1 146.02
Floyd County 60 $11,000 80.4 136.82
Carroll County 40 $16,550 88.8 186.37
Guthrie County 96.34 $10,600 73.5 144.22
Hardin County 150 $13,300 85 156.47
Clay County 189.5 $16,000 96 166.67
Kossuth County 342.88 $13,200 86.2 153.13
Mahaska County 182 $10,500 81.4 129
Hamilton County 215 $12,900 84.1 153.39
Marshall County 88.37 $14,400 92.8 155.17
Marshall County 49.38 $8,850 71.6 123.60
Clay County 72.5 $16,100 95.4 168.76
Monona County 118 $6,825 36.3 188.02
Webster County 120 $14,750 86.1 171.31
Calhoun County 80 $13,400 83.8 159.90
Montgomery County 230 $14,000 88.45 158.28
Carroll County 40.09 $13,938 70.1 211.27
This weeks report has a low of $123.60 per CSR2 point and a high of $211.27.  Not only is that a large spread but it shows a very clear picture that moderate quality farms are thriving in this market.  Don’t get me wrong, high quality farms are doing just fine but that premium $ per CSR point we always talk about seems to be more prevalanet in the 55-75 CSR range at the moment. Those moderate quality farms in aggressive neighborhoods with low sales volume will do exceptionally well becasue the demand is so high and competition thrives, at least in the run up.  Its not likely to last however.  Eventually as demand becomes more satiated you’ll see that premium move into the higest quality farms.  For those of us that sell land we can tell a few things from this principle.  First, its a timing indication of where we are in a cycle, the amount of demand left and the potential outcome of an auction marketing campaign.  When you can see moderate quality farms beating the dollars per CSR point raiting of the highest quality farms its not because they are better, its more about where they were at and the volume in that partiular area.  Its likely all there was to choose from so competition went to work.  The higher the numbers, the more demand we can see.

As we move farther into harvest and more farms hit the market I am positive we’ll see a high volume season this year.  That means the farms selling earlier in the season have a better opportunity at more money.  If you imagine the audience at the start of a show and the audience at the end of the show, its typically lower in the end.  This farmland sales season is probably going to be similar, you have a big audience right now as we head into Fall but many of those onlookers will have made a purchase by late Winter.  Many people ask me about the timing of a farmland sale.  There really isn’t a good answer to that question.  There are too many variables but at times like this there is an easy answer, right now!

Our chart shows the farmland auctions that sold this week across Iowa and there isn’t a “soft” sale in all of them.  Out of 21 farmland auctions this week there are only 6 of them with 4 digit results!  Thats pretty impressive when you consider that the last Iowa State University Land Survey showed an average land price of $7,559 per acre.

In the upcoming we have have a fair number of auctions coming to market including 1 farmland auction with over 700 acres of 90+ CSR2 ratings near Storm Lake in Buena Vista County.  It will be interesting to see the demand indicators during that auction.  To see that many acres of high quality farmland unloaded in 6 tracts will give us a good idea of how competitive land buyers are able to be.  If every tract is able to sell at a market high price it will be a great indication of the current strength buyers hold. With increased investor activity in the market right now I suspect this auction will breeze through the system and be an example of why buying high quality land is always a no brainer.

I will be back next week to report on this weeks sales.  If you enjoy our report scroll down and sign up for our newsletter where you can get more news, new listings and information on our services at DreamDirt Auctions.

 

Rachel Hoy is a licensed real estate agent and auctioneer at DreamDirt.  You can reach her at 515-954-8063 or email Rachel@dreamdirt.com 

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Jason is an Auctioneer and Land Broker and the founder of DreamDirt Farmland Auctions, This week Iowa's Weekly Farmland report covers land auction results across Iowa and significant elements affecting Iowa's Farmland Market. Email: jason@dreamdirt.com | Phone: (515)...

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