Land in Low Supply
Competition for land has kept values strong, averaging 20% higher values over comparable land in 2012.
The continued rise is mainly due to auction activity driving sales prices as purchasers vie for parcels of land. Mid- to high-quality properties still see such rises in value, while lower quality land values are steady.
"Values are still going up, but pace has slowed overall," says Derrick Volchoff, ALC, vice president of real estate operation at Farmers National Company. "Many transactions for high-quality land are being sold via auction, which drives prices through competitive situations."
Auctions have turned very competitive with bidding wars becoming the norm for high-quality land sales. Areas of the U.S. that normally don’t run auctions, such as the Delta region, now see them regularly, Volchoff says.
Prices in the High Plains continue strong into 2013. One major change in this region’s market is the impact of an inventory shortage that is a direct result of a strong sell-off of land in late 2012. "Forecasted tax law shifts and increasing prices to record levels spurred this high level of sales activity, which has led to a slowdown so far this year," says Monty Meusch, Farmers National Company area sales manager.
See the table above for state averages of prices paid for top-quality land.
Greg Halverson, Black Gold Farms
2012 Top Producer of the Year Winner
What do you know now that you wish you knew 30 years ago?
"I am convinced that change creates opportunity. We cannot be afraid of change; rather, we should embrace it.
"Thanks to my father, I know the importance of taking the time to do it right the first time. It doesn’t matter if it’s in the barn, on the tractor or in the office; it is much more efficient and productive to do a job once rather than relying on a do-over at a later time.
"Lastly, surround yourself with the best people possible. Hire the best at all levels in your company, no matter the size."
Cargill Acquires Assets of Northstar Grain LLC
Cargill acquired the grain storage and crop inputs assets of Northstar Grain LLC and associated properties in Decatur, Mich.
The facility has earned notoriety through its longevity and one of its prior owners. Northstar was first operational in 1849, making it one of the oldest working mills in the U.S. Additionally, former owner Mike Stamp declared Chapter 11 bankruptcy in November 2012, with estimated liabilities exceeding $50 million. Northstar has remained open since that time.
Stamp purchased Northstar in 2007 and made upgrades, including an initial boost in bin capacity from 150,000 bu. to 400,000 bu. He also repaired an old rail spur and reconnected it to the main line.
- Summer 2013