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Senior Contributor

$207 per CSR Point/$16,560 per acre/

 Faust/BaDeere-  a farm just sold for $207 per CSR Point. This is over 20x over the $10 per CSR Point it was selling for in 1986. This price is pushing the ROI Ratio down to only 3% so I don't see much land selling for much more than the $200 per CSR Point level currently. I think Iowa farmland will stabilize at this $200 per CSR Point level now. I see a total increase of around 20% for 2013 over the 32% increase for 2012. It has been a wild ride here on farmland values the last 5 years, we are very lucky so far. However, I really think anymore 25 to 35% yearly increases are over for a few years, in fact if we increase just 5% in 2014 I wouldn't be surprised, I think the outside land investors have now pushed prices to the 3% ROI and I don't think they will push prices higher so the ROI will only be 1 to 2%. I think the 3% ROI Ratio will be it for both the outside farmland investors, along with farmers. Although farmers may be willing to take only a 2% ROI for a few years. You know how farmers are with land. I think the $200 per CSR Point is about as high as outside non-farmer investors will push good quality Iowa farmland for a selling price. I see the $200 per CSR Point as a strong resistance point to break and revenue per acre would need to increase another $200 to $300/acre, with corn production costs staying level before we would break though this very strong $200 per CSR Point Resistance level. I just feel this $200 mark is about as high as Iowa farmland will go for at least the next couple of years.

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13 Replies
Advisor

Re: $207 per CSR Point/$16,560 per acre/

RSW- where was the farm located . . . only farms that sell for that price are south of I-80. I am not so sure that will be the top, people want their principal protected now, even if they have to pay a premium and take the discount later, they will have principal tied up in an asset that is "real" not paper. I will give you an example of something being over priced.  But if you want it . . . you want it.

 

I have been looking for a Mosin-Nagant 91/30 sniper rifle with matching numbers and a matching numbered scope that was original to the rifle for a long, long, time. I ran across a lot of them, but very few had the scope numbered to the rifle.

 

  Well that rifle was worth probably about $600, I ended up paying $1325 for it to a fella who owned it in Texas . . . why . . . because I wanted to own one and he had what I wanted.  

 

I guess, when a person wants to own Iowa farmland, like that rifle I purchased, they will pay a premium, and maybe even a very large premium for the right piece of land under the right circumstances.

 

This whole economic fiasco is going to blow sky high, and of course I don't know jack about investments, because I have only owned farmland and gold in my lifetime.   I guess you could say I am not the sharpest knife in the drawer.  The first time around I lost my ass, but it looks pretty good so far the second time around. lol.  

 

I do not know what the top price is for Iowa class 1 land, or class 2 land or even class 3, land all I know is that it is in Iowa, and right now land here is at a premium but . . . the blowout is coming. Adios Amigo. John. 

 

 

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Veteran Contributor

Re: $207 per CSR Point/$16,560 per acre/

Sounds like you hit the trifecta, not to sure bout the future no one ever is but I'd say you are a wise man. Sell it all now and buy it back for half price in a couple years. You can only go down when your on top.

 

When uncle sam quits makin ethanol and all the other countries jump on the train and start growin corn and beans. Or Monsanto makes some chemical soup that takes the place of corn and beans.

 

It's coming sooner than ya think. The second Ben removes the sentence "For an extended period of time" from the FOMC report it's all over. Just a thought.  

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Senior Contributor

Re: $207 per CSR Point/$16,560 per acre/ Is your Russian Rifle a 7.62*54R?

Yes Faust, you are probably right, some one will pay $240 per CSR Point. It doesn't make good economic sense, but some one has there eye on buying Iowa farmland and will pay that high price. It was Story County that sold for over $200 per CSR Point. An excellent high quality Iowa farm, just 80 acres however. A Russian Rifle, right? For $1,300+, what caliber is it? A 7.62*54r? Like a 30/06 right? Sounds like a nice rifle and a collectors rifle. I have a Savage, believe Model 100?, or is it a 110 Model? In 30/06 and only paid $300+ for it 16+ years ago. Has a 3*9x scope on it too, shot many a coyote, beaver, and woodchucks with it, also 2 deer

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Senior Contributor

Re: $207 per CSR Point/$16,560 per acre/

Yes Minnosota, I never thought we would hit over $200 per CSR Point. I am not married to it, but really enjoy owning farmland over stocks or bonds. Guess this does prove the point that good quality farmland is a long-term investment. Selling just a 160 acres would bring around $2.5 Million today. Bought a 320 acre farm in 1999 for only $712,000 and had the chance to buy the other 320 acres across the road for the same price, but turned it down!!!!!! Big mistake in 1999, only $2,225/acre, well, live and learn.

Advisor

Re: $207 per CSR Point/$16,560 per acre/ Is your Russian Rifle a 7.62*54R?

rsw - is is a 1943 7.62x54r.  I had one in my collection, but it was a 1917 Westinghouse, that was owned by my uncle.   I am looking for a much earlier one now (pre ww1) it is fun collecting them, but not as much fun as collecting farms. lol. John

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Senior Contributor

Re: $207 per CSR Point/$16,560 per acre/

RSW,

 

Here's a dumb question: Is there any way to increase a farm's current CSR? For example, if the soil on your property is listed in your county office as having a CSR of 79, is it then possible (short of moving a couple thousand dump truck loads or so of 90 CSR dirt onto your property) to increase that number?

 

Or is a farm's corn suitability rating just one of those "it is what it is" sort of things?

 

Thanks,

Packard

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Senior Contributor

Re: $207 per CSR Point/$16,560 per acre/SLOPE OF LAND IN THE CSR Rating!!! Very Important!!!!!

Interesting on trying to increase the farms CSR Value, but no, it could not be done given an Iowa corn field can be 1 mile long on a 1/2 section. However, it is possible that you have the same Nicolent Loam Soil, but one has a 0 to 2% SLOPE, which gives it a 85 CSR Rating. However, you can have the same Nicolent Loam Soil that has the 85 CSR Rating, but because it has a 2 to 4% SLOPE it is only a 77 CSR Rated Soil. Corn Suitability Ratings take into account BOTH the soil type, such as Nicilent Loam, but ALSO the SLOPE of the soil. Yes, it seems a little off that 2 soils can be the exact same soil, but the one with the 0 to 2% SLOPE is rated 85 CSR, and the one with a 2 to 4% SLOPE is rated 77 CSR. CSR is a function of both the soil type, PLUS THE SLOPE of the land. These 2 factors, Soil Type and the SLOPE, make up the CSR Rating. Know it seems screwed up and hard to understand, but all of Iowa's CSR Ratings are determined by the SOIL TYPE, along with the SLOPE of the soil type, like a 0 to 2% SLOPE or a 2 to 4%, and if the Nicolent Loam is over a 4% SLOPE, probably less than a 70 CSR. Hope you understand the IOWA CSR Rating Scale better now. The best and true way to increase your Iowa farmland corn yields is to PATTERN-TILE or making sure you have the best possible drainage of your farmland possible. Too much rain/moisture has destroyed 10,000 times the corn yield than not enough rain. To much rain makes for water-logged soil and the corn turns that absolutely bright yellow color meaning a 50+bushel corn yield lost. 

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Senior Advisor

Re: $207 per CSR Point/$16,560 per acre/SLOPE OF LAND IN THE CSR Rating!!! Very Important!!!!!

From time to time in my area producers spent the money to have land leveled, is that not a possibility?  If all that separates good from bad is a small slope, seems like something that can be fixed to me.  There has been circle after circle leveled in this country over the years.

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Senior Contributor

Re: $207 per CSR Point/$16,560 per acre/SLOPE OF LAND IN THE CSR Rating!!! Very Important!!!!!

RSW,

 

As before, I got some really, really good stuff in your answers.

 

You da man!

 

Cheers,

 

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