Iowa Farmland Report Week 6 of 2018
Average Price per CSR2 Point in Iowa
Welcome to our Iowa farmland report for week 6 of 2018. Dollars per CSR2 point this week swings $12.39 higher than last weeks average ending at $96.13 per CSR2 point. Good farmland sale prices this week and an abundance of good quality farms kept the average up. The CSR2 rating of farms sold this week averaged 74.56 which was also above last weeks average of 71.4 which shows the premium in those higher quality farms. The land sold this week was 84.02% tillable which was also up slightly from last weeks report by 3.9%
Iowa Farmland Sales Volume
This weeks Iowa farmland report shows volume was lower than last week with only 1206.28 acres sold of which 1013.55 was tillable acres. This was lower than last weeks tillable acres sold of 1225 out of 1530 acres. Farmland sales volume remains very low right now and contributes to higher values in farmland. We almost have 2 farmland markets running side by side right now. You have the traditional market where estate and retirement farms are being sold and a more quiet out of the public eye leaseback market which tends to happen most this time of year. Leasebacks are farms for sale by farmers typically experiencing cash flow difficulties and even potentially financing issues. Perhaps the banker has told them to liquidate a particular asset to get their cash flows in line or they’ve just felt the financial pressure themselves and would like to create some breathing room. There are farms available in this leaseback market and a fair number this year however its much more difficult for buyer and seller to connect in this way because of the “secret” nature of the situations where the seller does not want any attention and there are always more strings attached to the sale. Ideally the seller will require that they remain the tenant for a period of time, often require a first right of refusal or even a definite sale back timeframe and the farms tend to be priced more in the premium range despite the strings attached. Another downside is you could be taking on a tenant that is experiencing financial difficulties but a positive is you are taking on a tenant that has a sense of pride in the farm you’ll own, has farmed it in the past and very likely to take good care of the farm. If you are interested in looking at available leaseback farms lets us know. They are rarely ever advertised and requires phone calls to find them.
Year to Date Average Farmland Prices in Iowa for 2018
Highest Selling Farm This week
A sale of $148.51 a CSR2 point tops the charts this week in Tama County at $13,500 per acre on 40.36 acres of farmland. This was a 100% tillable farm and very good quality at 90.9 CSR2. There is never any doubt these smaller acreage farms with high CSR2 ratings are going to do extremely well in the auction environment. We call these farms “An Auctioneers Dream” when we talk about them because we know the intense competition we can create for these farms when exposed properly.
Farmland Price Summary for Iowa
The market continues to produce very good farmland prices across Iowa on low volume and low interest rates. We see people leaving auctions disappointed they could not buy the farm and often times frustrated but as one runner up bidder told me recently “I had to stop somewhere but I didn’t want to” Good quality farms will continue to produce good results for sellers I am confident of that for a long time to come. Medium quality farms tend to be the more hit and miss category thats a little harder to predict from sale to sale and can really be affected by high sales volume in the area they are located. We’ve seen instances where 4 or 5 farms in 50-60 CSR2 range have sold in close proximity in a shorter time frame and the saturation of sales probably affected the price outcome.
Be sure to check back next week for the next edition of the Iowa farmland report and we’ll let you know how this week end. We’ll be selling in Palo Alto County this week and back in Sioux County next week. Please be sure to check our auction calendar, we are always learning of new buying opportunities and listing new farms.
Iowa Farmland Prices February 2018
Week 6 Iowa Farmland Report
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Featured Farmland Auction For Sale in Iowa
Farmland Auction Join us on Feb 14th at Graettinger Iowa for this the sale of this farmland owned by the Willis Voxland Estate. These 2 farms total 118 acres and will be sold in 2 individual tracts. Both are good quality farms with high CSR2 ratings. You can learn more on this farm and other farm auctions and listings at www.DreamDirt.com