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September 2009 Archive for Your Precious Land

RSS By: Mike Walsten, Pro Farmer

Mike Walsten has covered major business trends in agriculture for more than 40 years.

Iowa Land Values Post 2% 6-month Decline

Sep 23, 2009

Mike Walsten

The average value of good Iowa cropland fell 1.9% during the six-month period ending in September. That's according to a survey conducted by the Iowa Chapter of the REALTORS® Land Institute (RLI). Combining this 1.9% decrease with the 7.6% decrease reported in March 2009 indicates a statewide average decrease of 9.5% for the year from September 1, 2008 to September 1, 2009. The districts varied from a 1.2% increase in North Central Iowa to a 5.1% decrease in Southwest Iowa for the March 2009 to September 2009 period.


Factors contributing to the decrease in farmland values include: lower commodity prices, low livestock prices, volatility in the stock market, and declining confidence in the world economy. Positive factors include low interest rates, well capitalized farmers, anticipated good yields, strong farm profits in 2007 and 2008, lack of alternative investments, and short supply of listings. The Iowa Farm & Land REALTORS® farmland value survey has been conducted as of March
and September since 1978.

The press release is here and the full data is here.

If interested in seeing a copy of LandOwner, just drop me an email at landowner@profarmer.com or call 800-772-0023. Or click here to access the full report.

 

Missouri Survey Finds Land Values Fell Nearly 6%

Sep 16, 2009

Mike Walsten

The average value of good Missouri cropland fell 5.6% during the 12-month period ending in July. That's according to a survey conducted by University of Missouri Extension Economist Ron Plain. That same survey found pastureland slipped a slim 1.4% while timber/recreational ground dropped 9.3%.

The survey pegged an average acre of good cropland at $2,788 and an average acre of good pastureland at $2,021 an acre. In terms of looking ahead, most survey respondents expect farmland values to continue to decline by July 2010, but at a slower pace than last year.

I have most of the details of the survey in my September 17 issue of LandOwner. If interested in seeing a copy, just drop me an email at landowner@profarmer.com or call 800-772-0023. Or click here to access the full report.

 

Two Auctions Show Healthy Illinois Land Market; 1,600 Acres Brings More than $10.49 Million

Sep 11, 2009

Mike Walsten

I first wrote about what appeared to be an important market test for the Illinois market on August 13 (click here to see the post). The sale involved 1,600 acres of high-quality farmland located in three tracts. There was 733 acres south of Danville, in Vermillion County; 380 acres on the edge of Granite City in Madison County; and 487 acres near Litchfield in Montgomery County. All three locations featured access to two rail lines, interestate highways and flat, black soils. The three parcels had been assembled by VeraSun Energy Corp., which has since moved into bankruptcy.

The sale, conducted by Schrader Real Estate & Auction Company of Columbia City, Ind., was held Thursday, September 9. The final tally was $10,492,610.

"There was a lot of interest in this sale, not only among those seeking to buy the land, but among those who saw it as a test of the strength we've continued to see in the market for tillable farmland. Even with approximately 1,600 acres selling in one day, the market absorbed it nicely," said company president Rex Schrader.


The sale included:

  • Approximately 487 acres in Litchfield, Ill., in Montgomery County, which sold for $3,282,610, or an average of $6,740 per acre. The land, primarily tillable farmland, sold to five different buyers, with the two largest buyers including a local buyer and an out-of-state investor seeking land for a possible future grain terminal. "There was a great deal of interest in specific tracts as well as various combinations. The rail access made it attractive as a grain terminal site, and that added to the demand," said Schrader.
  • Approximately 380 acres in Madison County, Ill. After active bidding in various combinations, the property sold to a local farm family as an entirety for $2,884,000, an average of $7,591 per acre.
  • Approximately 733 acres in Vermilion County, in eastern Illinois. After bidding in various combinations, the property sold as entirety for $4,326,000, or $5,903 per acre. "This was a buyer who was adding to his family's existing holdings. While there was a great deal of participation among both farmers and investors, institutional interest was diminished a bit because some of the land excluded mineral rights and was adjacent to a nearby Superfund site. There was also a portion of the land where underground mining had been conducted some years back," said Schrader.

The land in Montgomery and Madison counties sold in a morning session in Staunton, Ill. The Vermilion land sold in an evening session near Covington, Ind.

In addition to Thursday's auction, on Wednesday September 9, 198 acres near Danvers (west of Bloomington) in McLean County was auctioned by Soy Capital Ag Services, Bloomington. Tract 1 consisting of 77.6 acres and a Productivity Index of 143 (maximum 147) brought $7,500 an acre. Tract 2, 80 acres and a PI of 133.8 brought $6,800 an acre. Tract 3, consisting of 40 acres and a farmstead with older buildings and a PI of 130.2, brought $6,800 an acre. All three tracts were purchased by local farm families.

If interested in seeing a copy of my newsletter, LandOwner, just drop me an email at landowner@profarmer.com or call 800-772-0023.

 

Survey: Good Missouri Cropland Down 5.5%

Sep 03, 2009

Mike Walsten

The value of good Missouri cropland and pastureland declined 5.5% and 1.4%, respectively, for the year ending in July, according to a survey conducted by the University of Missouri Extension. The annual survey found the estimated average value of good cropland fell from $2,952 an acre in July 2008 to $2,788 an acre in July 2009, or $164 per acre. Good pastureland slipped only marginally from $2,050 an acre in 2008 to $2,021 an acre in 2009.

The survey found most respondents expect farmland values will continue to decrease for the next 12 months, but at a slower rate than last year. On average, they expect the value of cropland to decline by 1.6%, with pasture to decrease by 2.9%. Click here to check out the complete survey report.

If interested in seeing a copy of my newsletter, LandOwner, just drop me an email at landowner@profarmer.com or call 800-772-0023.

 

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