Iowa’s Weekly Farmland Sales Report Sept 10th

Sep 10, 2021 | Iowa Farmland Prices, Iowa Farmland Report, Iowa Land Auction Company

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

You talk about a busy week as a land salesman in Iowa, this was it!  We had land auctions in Missouri and Iowa this week and farmland prices are nothing short of hot right now.  In fact, we had the honor of selling a very high quality tract of land for the Kenton Bates Trust in Pottawattamie County this week.  This farm had an 88.1 CSR2 and it was good flat black farmland.  We launched this auction 30 days ago, that is the typical timeframe for our auctions and it was immediately clear not only from the volume of phone calls, but the early bidding that this farm was going to do very well.  The farm had gone over $10,000 per acre in online bidding. A full week before the end of the auction bidding!  Before the end of the auction it would gain another $3,550 in bids.  Discussion among our staff revolved around just how aggressive the bidders were for this auction and our observations of the different behaviors we saw with this farm auction as well as other recent sales.  The results were exceptional for the area and the seller was very happy with the results.

farmland auction result
old farm sale sign

Kenton and Pam Bates came to their auction with a piece of farm ownership memorabilia.  He had purchased the farm he was selling on Feb 18, 1980 when the average cost of an acre of tillable farmland in the United States was $737 per acre.  In Iowa, that year the average cost of an acre of tillable farmland was $1,840 per acre.  They paid well over the average that day at $2,560 per acre.  Today the average price of farmland in Iowa is $7,559 and their farm sold on a DreamDirt Auction for $13,550 per acre!  At the end of the auction Kenton and Pam were elated to have sold into this market today and achieved such a good price for the farm they worked hard to have and own.  Kenton said he owed a lot of thanks to his high school VocAg teacher Mr. Hunolt that told him “boys don’t be afraid of stepping out and buying a farm.  To many guys wake up, they are 60 years old and have always been a renter”. That says a lot about the upside of being a farmer that is simultaneously an investor.

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

Not only was it a busy week at DreamDirt this week but across the state, farms changed hands at auctions and by private sales.  We have been helping multiple 1031 clients identify replacement farms and we were successful in locating a farm for one of them this week and negotiating a sale for them as well as conducting two successful land auctions as well as listing several new farms for upcoming auctions later this year!

Iowa Farmland Sales This Week

Here is a rundown of what happened in Iowa farmland sales this week. 

County Acres Price
Hardin County 160 Acres $13,600
Marshall County 464.14 Acres $11,182
Henry County 141 Acres $10,000
Pottawattamie County 98 Acres $13,550
Mahaska County 160 Acres $13,100
Sac County 65 Acres $17,500
Union County 238 Acres $8,300
Greene County 80 Acres $10,300
Kossuth County 140 Acres $13,300
Grundy County 626 Acres $11,709
Clay County 160 Acres $13,750
Jasper County 301.25 Acres $11,180
Story County 99.36 Acres $17,350
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history of farmland price in iowa

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Corn Prices and Farmland Prices

The markets eventually catch up with farmland prices and its hard to make heads of tails of some of the recent developments in the farm economy.  This chart shows the cash price of corn and as you can see we’ve been loosing ground pretty steadily and in large part the most recent dip can be attributed to shipping disruptions over Hurricane Ida.  At the same time China has cut its forecast for purchases of grain due to falling hog prices.  Late but timely rains in some areas have helped boost production and are likely to change estimates in the USDA report due out later today (September 10th). It’s pretty likely todays report will find more acres and more bushels and it will impact corn prices more.  As we dip below $5 per bushel again, we start to head back to that territory we just came from and its very likely in time to affect land prices.  There is always a slow reaction to lower prices as the money from the better prices spends down.  I fully expect we will continue to see a strong land market through harvest, but this pressure will eventually lead to decreased competition for land resources.

corn prices

Other Factors Holding Farmland Prices Higher

It’s no secret that the cost of money or borrowing has a very big impact on what a buyer can pay for farmland.  The truth is, farmland has only one value but how that value gets split up is what will make a difference to the seller of farmland.  The current Effective Federal Funds Rates are very low and the cost for banks to borrow money to loan makes farmland prices higher right now.  It doesn’t change the value, it only changes the price reflected.  The reason for that is because less money goes to the bank or cost of borrowing money, more of it goes to the seller of the farm and is reflected in price rather than cost of the transaction.  I should point out that what you see in the chart is not what a farmer can borrow money for but the Federal Rate becomes a foundation that consumer rates are based on when banks loan or borrow each other liquidity.  These rates are always a moving target.  The Federal Open Market Committee meets 8 times per year to determine the Federal Funds Target Rate which influences the Effective Federal Fund Rates through open market operations or by buying and selling government bonds (debt).  All of this activity will be dictated by the current state of the economy and will dictate to a degree, farmland prices.

Come back to the DreamDirt Blog every Friday for a new Iowa Farmland Report!  If you are considering selling farmland you can access a myriad of free sellers resources at DreamDirt.  Get a quote to sell your land quickly.

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