cancel
Showing results for 
Search instead for 
Did you mean: 

Mo Land Auction

Monday, Nov. 25th was the auction sale of 150 acre farm in west-central Missouri.  The farm was about 70% tillable, with a small, 2 bedroom house included.  The sale price was $8,100/acre and the reported buyer was Brett Begemann, CEO of Monsanto.  The Begemann family farm is located near this tract.  Excluding the house, the price per tillable acre will likely be about $10,500/acre.  Looks like Missouri farmland is not showing any signs of weakening.  Cash rents in this area range from $150-$250/acre. 

0 Kudos
8 Replies
Kay/NC
Honored Advisor

Re: Mo Land Auction

Clearly not a typical buyer, wouldn't you say?

Taking the average of your figures, rounding things off a bit, a 2% rent isn't any return at all, if your property taxes run 1% (pretty typical where we live and farm) and you carry some liability insurance to protect the asset you have just bought. Even at the bargain basement interest rates we have " enjoyed" for a while now, it is still not a good investment, if you buy it to rent out.

Same would be true of the legendary $20K per acre places, even at $400 rent per year. Bigger numbers, but same proportions.

The bigger they are, the harder they fall...
0 Kudos
dennymal
Veteran Contributor

Re: Mo Land Auction

I think its very typical what land is bringing. Here in central Iowa we had 2 sales last week, one for 13,600.00-the other for 14,500.00 both farms would probably rent in that 400 dollar range. FCS lender told me 4.00 corn hasn't slowed the sales of good quality land-its still bringing a premium.

0 Kudos
Kay/NC
Honored Advisor

Re: Mo Land Auction

Let's see what five years of $4 ( or probably less) corn will do.
0 Kudos
WCMO
Senior Advisor

Re: Mo Land Auction

Kay - You're on target, not a "typical" sale.  Extraordinary non-farm income, very close to the "home" family farm, and a very nice lake area to get away from things, do some fishing and camping, while visiting family/friends in the area.

0 Kudos
Shaggy98
Senior Advisor

Re: Mo Land Auction

Is that your prediction Kay?

Looks like you'll be getting coal in your stocking this year -- I mean for 5 years. LOL

Have a Happy Thanksgiving.
0 Kudos
kraft-t
Senior Advisor

Re: Actually Denny

Some of these folks don't care about short term income. They are looking to park their money for the long term. In fact short term income would mean additional taxes.

 

It's like trying to give a valid reason for buying a $80 K mercedes. They simply do it because they can. Like my mother in law finding fault in her old car to justify buying a new one. I told her her old car was in fine condition but you can buy a new car just because you want one. And that is exactly what she did. Brand new top of the line Buick.

 

BTW another former Monsanto exec has a home for sale on Captiva Island. His wife died and he is  selling the property. $6 million was the last number i heard but is a fine property with a guest house that rivals a lot of the better homes.

 

MY daughters family has spent some time there as guests of his neice.

0 Kudos
Kay/NC
Honored Advisor

Re: Mo Land Auction

As long as Santa doesn't bring me switchess, I am good!
0 Kudos
dennymal
Veteran Contributor

Re: Actually Denny

Makes sense Kraft-I'm just glad I bought enough of this dirt earlier in my farming career to be pretty well off at 58. Plus I have some really good landlords. Farm Credit had a hog finisher site for sale-the bldgings needed some work but generally were in pretty good shape/nobody would touch them-they finally sold them for around 60 cents on the dollar and I know the guy that bought them and he's making a killing right now. My point is this farmers here are bidding this farmland up to where it don't make sense but a good hog finisher site where you could get a great rate of return right away hardly gets a bid.

0 Kudos