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Senior Contributor

Farmland Sale-Faust & BaDeere

Say guys, to get our minds off this nightmare crop year so far this year, below is a recent farmland auction price. It was around $182 per CSR Point.

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5/24/2013 

160± Acres, Pocahontas County, Iowa, were sold at auction on Friday, May 24, 2013, at the Pocahontas County Expo Center in Pocahontas, Iowa.  For additional information, please contact Jeffrey T. Obrecht, Agent, at (641) 648-5065 or click here

$2,080,000…$13,000/A 

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14 Replies
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Senior Contributor

Re: Farmland Sale-Faust & BaDeere

Is this a great country or what?

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Veteran Contributor

Re: Farmland Sale-Faust & BaDeere

That farm was bought by my neighbor whos wifes' family was selling it.  You can deduct 17% off the sales price as there were 6 kids in the family.  Really glad to call him a neighbor and friend

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Honored Advisor

Re: Farmland Sale-Faust & BaDeere

Aw, they were just after the "mineral rights"Smiley Very Happy   Seriously though, if someone was in the land market, that doesn`t sound too bad, a nice laying quarter will give you more enjoyment that $2 mil sitting in the bank locked up for 4 years yielding 3%.  Like Mike said it sounded like that sale was a "family deal" which cheapened it up a bit.

 

There`s a story of a big drainage contractor that borrows farmers money to tile, in the 80`s he made out like a bandit repossesing farms that couldn`t make the payments.  Tilers won`t touch certain farmers because they are notorious for not paying their tiling bills. Now I see that drainage contractor is again making the rounds a hundred miles from "home".  That doesn`t have anything to do with the Pocahontas sale but I`m always curious where the money comes from to make these eye-bugging prices. 

 

Banks only lending 3 grand per acre, I don`t think is creating a "bubble" but the creative way some of this land is puchased makes one scratch his head.   I think if there is a mini-crash you`ll see some sellers getting the land back that they owner financed.  And perhaps that drainage contractor will reap a harvest of 50 foot pattern tiled land that he has a mechanics lien on.   It might be a game of musical chairs one day.

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Senior Contributor

Re: Farmland Sale-Faust & BaDeere

Mike & BaDeere- Mike so you knew who bought the farm, kinda of a family deal as much of the farmland sales are. And yes BaDeere, owning a nice 1/4 section is alot more fun than just owning $2 Million dollars of stocks or bonds. This 1/4 section appears to be a little above average with a 78 CSR Rating on the dirt, Probably 200+bu/acre dirt, wonder how the drain tiling is on it? Really not much for sale right now, but some more auctions coming up in July. How is your planting going? It's been a nightmare in my part of North-Central Iowa.

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Senior Contributor

Re: Farmland Sale-Faust & BaDeere/ MORE FARMLAND SALES

A few more Farmland Sales, all are just average to low-average CLASS B CSR Rated dirt, not the really good Iowa stuff that does well over 220bu most years. Not too bad of prices for your just average, to low-average, run of the mill Iowa grain farms. The average Iowa farms all seem to be bringing $11,000 to $14,000/acre. The  550 acre farm, don't count TRACT 3, that was a junk farm with a 40 CSR Rating. Probably the guy wants to hunt on that one

 

 

 

Delaware County, IA
4/5/2013

  • 76 acres sold for $948,100.00 ($12,475.00/A)

 

Story County, IA
3/22/2013

  • 80 acres sold for $1,160,000.00 ($14,500.00/A)

 

3/20/2013 

550± Acres, Grundy County, Iowa, were sold at auction on Wednesday, March 20, 2013, at the Beaman Memorial Hall in Beaman, Iowa.  For additional information, please contact Ben Watson, Agent, at (641) 483-4249 or click here

Total: $5,539,000 

Tract 1: $11,000/A 

Tract 2: $10,000/A 

Tract 3: $4,100/A 

Tract 4: $12,200/A 

 

 

 

 

 

 

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Veteran Contributor

Re: Farmland Sale-Faust & BaDeere

There was a standing offer of $12,500 before the auction also.  This guys dad is 90 years old and has quite a bit of land paid for so where else do you put money?

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Senior Contributor

Re: Farmland Sale-Faust & BaDeere/MIKE NCIA

So a standing offer of $12,500/acre, not to shabby for CLASS B+ Iowa dirt, it looks like it lays pretty good and has a good-sized chunk of 50 acres of Webster Clay Loam dirt with 0 to 2% Slope. That Webster Clay Loam is really good corn soil, the 220bu+ type of good Iowa dirt. It will be interesting to see what the Bible of Iowa Farmland Values (The Iowa State University Farmland Survey) says is the percentage gain in values for 2013 will be. The survey comes out in December/ of 2013. I believe it could say around a 20% increase for 2013. Very hard to believe in 1986 that the high-quality, top-notch dirt was going for $1,000/acre and at the end of 2013, it will probably be $16,000 to $18,000/acre, a 18 times increase in 27 years. That is much, much, better increase than the SP500 Index or bonds. Plus you could leverage your farmland investment by 90%, meaning all you needed was a 10% downpayment and 90% Borrowed Money. That is how people get rich by leveraging there investments like that. Of course you can also go broke that way too if Farmland hadn't performed as well as it did the last 27 years. Just a chance you take to be wealthy I guess, just like all investments. 

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Senior Contributor

Re: Farmland Sale-Faust & BaDeere/MIKE NCIA

It is very easy to count your chickens before they hatch, but to cash in is harder

 

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Senior Contributor

Re: Farmland Sale-Faust & BaDeere/OLD MAN

Yes old man, it is very easy to count your chickens before they hatch. I will not ride down another Farm Crisis where Iowa farmland values fell from $5,000/acre down to $1,000/acre. It took close to 6 years for land values to drop from there high down to there low. 6 years is a long time in warning farmers of what was going to happen, and even before this 6 year time period, there were 2 years of warning of what was to come, This started in 1979, the high farmland value was reached in 1981 at $5,000/acre, and the low was in 1986, at $1,000/acre. So almost an 8 year time period. I see no reason that if another Farm Crisis happens, it would not follow the path of the mid-1980's crisis. Just my opinion, but $5 corn does support an ROI Ratio that justifies $12,500 to $14,000/acre land values, at least in Iowa anyway.

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