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Senior Contributor

5 No Sale IL Farms- is the farmland value peaked for now? The million dollar question

Below are 5 farms that failed to make the reserve the owners had at auction. This could be a sign that the short-term peak in farmland prices has reached it's high value per acre. Or that the owners had the farms over-valued. Guess we will know the answer to this question by the end of 2014. Also, looking at the expected ROI Ratio (Return on Investment) for Iowa Class A dirt (CSR POINTS OF 80 AND HIGHER), The expected 2014 ROI Ratio using an average yield and $4.75 new crop corn price says Iowa farmland has also put in a land value top for now. Anyone that has the answer to this question wins a bottle of Jim Beam. Farms are listed below.

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DeKalb County, IL
3/18/2014

  • 80.92 acres sold for (/A)
DeKalb County, IL
3/18/2014
  • 80.92 acres sold for (/A)
DeKalb County, IL
3/18/2014
  • 80.24 acres sold for (/A)
DeKalb County, IL
3/18/2014
  • 117.95 acres sold for (/A)
DeKalb County, IL
3/18/2014
  • 121.28 acres sold for (/A)
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Senior Contributor

Re: 5 No Sale IL Farms- is the farmland value peaked for now? The million dollar question/Confusion

To add confusion to the question of if farmland prices has peaked, below is a recent sale in Iowa. The farms overall CSR Ratio was only 78. CSR's of 78 are ok and very capable of 200+ bushels/acre yields for corn and 55+ for beans. However, a 78 CSR Ratio is one step down from 85+ CSR Ratios which I consider to be the cream of the crop for Iowa dirt. A 78 CSR Ratio and a $13,600/acre selling price puts it at $175 per CSR Point. To put this $175 per CSR Point in perspective, in 1986 I was paying around $10 to $12 per CSR Point for the farms I bought in the 1986 to 1989 time period. Yes, that 1986 to 1989 time period was one helluva time to be buying Iowa farmland and was probably a once in a lifetime chance to buy extremely cheap land.  Sale is listed below:

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Benton County, IA
3/7/2014

  • 200 acres sold for $2,720,000.00 ($13,600.00/A)
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