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August 2012 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.

Illinois Farmland Posts 5% Gain First Half 2012

Aug 29, 2012

Mike Walsten

The value of Illinois farmland rose 5% during the first six months of this year, according to a survey conducted by the Illinois Society of Professional Farm Managers and Rural Appraisers. While stronger, the pace of increase in the gains of Illinois farmland was at a slower rate than the double-digit increases posted in recent years, indicates Don McCabe, AFM, chairman of the Society’s survey project and president of Soy Capital Ag Services, Bourbonnais, Illinois

"On July 1, farmland prices averaged $11,200 (an acre) for excellent-quality farmland, $9,200 for good-quality farmland, $7,800 for average-quality farmland and $5,900 for fair-quality farmland. A year ago the 2011 mid-year survey indicated the value of the best quality land surpassed $10,000 for the first time," McCabe explains.


In a normal year, excellent-quality farmland averages more than 190 bu. of corn per acre, good-quality land 170 to 190 bu., average-quality land 150 to 170 bu. and fair quality averages below 150 bu. per acre. Survey respondents indicate 2012 corn yields will be 44% lower than expected and soybean yields will be 30% lower than expected.


McCabe notes the volume of farmland being sold during the first half of this year was down slightly compared to a year ago. "Most respondents expect the volume of sales to be at last year’s level or greater during the second half of the year," he states. Forty percent expect higher sales volume, 42% expect the same volume.
 

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

Central Corn Belt Values Up 15% Over Year Ago

Aug 16, 2012

Mike Walsten

Central Corn Belt farmland values continue to rise but at a much slower pace, the most recent survey from the Federal Reserve Bank of Chicago reveals. This confirms what we've been telling LandOwner readers since earlier this year. The bank, which serves the northern two-thirds of Illinois and Indiana, all of Iowa, the lower peninsula of Michigan and southeast Wisconsin, says the value of district farmland rose 1% during the second quarter of 2012 compared to the previous quarter. Values are up 15% on a year-to-year basis.

Leading the charge to higher values is Iowa, which is up 24% on a year-ago basis and up 2% on a quarterly basis. Illinois is up 15% on an annual basis with Indiana and Wisconsin up 12% and 13%, respectively. The survey found 22% of survey respondents anticipate higher farmland values in the third quarter of 2012 and only 4% expect lower values. "The drought did not seem to have stifled all the momentum of rising agricultural land values," the bank said.

Link to the full report:
 

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

Survey: 25%-plus Annual Gains Seen in Plains Cropland Values

Aug 15, 2012

Mike Walsten

Cropland and ranchland values continue to post strong gains over year-ago levels, but the rate of increase slowed during the second quarter quarter of 2012, according to the most recent survey of ag bankers in the central and southern Plains conducted by the Federal Reserve Bank of Kansas City. The bank serves Kansas, northwest Missouri, Nebraska, Oklahoma and the Mountain States of Colorado, Wyoming and northern New Mexico.

"District farmland values rose less rapidly in the second quarter and remained well above year-ago levels," the bank said. "Non-irrigated cropland values rose solidly and irrigated cropland values held steady. Looking forward, more than three-quarters of survey respondents expected farmland values to hold at current levels during the rest of the growing season."

Farmland values throughout the bank district rose less than 3% during the second quarter, roughly half the rate of growth experienced at the beginning of the year. Non-irrigated cropland values rose solidly, while irrigated cropland values held steady and ranchland values edged up, the bank said.

Despite the slower quarterly gains, district farmland values remained well above year-ago levels. "During the second quarter, district irrigated and non-irrigated cropland prices remained more than 25% above year-ago levels while district ranchland values climbed higher with annual value gains averaging 16%. Bankers noted that strong demand for farmland raised interest in more marginal tracts of land with production potential," the bank reported. Nebraska continued to lead district annual farmland value gains with cropland prices more than 35% above year-ago levels and ranchland values almost 27% higher. However, annual farmland value gains in Nebraska were beginning to slow with less rapid land value growth during the second quarter. Oklahoma bankers reported the smallest year-over-year gains in farmland values as many areas of the state endured a second year of extreme drought.

Link to the full report:
 

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

Drought? What Drought? Record $15,600/acre in Central Illinois!

Aug 10, 2012

Mike Walsten

As the drought has extended, so have worries over a collapse in the price of farmland. While we've seen softness in some auctions recently, we've also seen exceptionally strong sales, too. Prime example is the sale last night in Christian County, Illinois. At stake were 163 acres of prime farmland located one mile west of Assumption. The property offered 158.5 tillable acres and an average soil productivity rating of 133.1 (147 maximum).

Handling the offering was Bruce Huber with Schroeder/Huber LLC, Decatur. William Beck Auction and Realty, Edinburg, co-brokered the sale and "cried" the auction. Huber says there were about 145 people at the auction with 12 registered bidders. The opening bid was $10,000 and the auction was over in under 15 minutes. A neighboring farmer was the buyer.

Similar strength was evident Monday night, August 6, when 79-plus acres three miles northwest of Wolcott, Ind., (White County) sold for $13,189 an acre. Handling the sale was Schrader Real Estate & Auction Co., Inc., Columbia City, Indiana. The most active bidders, according to firm president R.D. Schrader, were neighboring farmers.

"For a couple of years, the amount of farmland for sale has been very low compared to the demand and when a farmer has the opportunity to own and work additional land near his existing farm, he knows that it may be decades before that property goes up for sale again, so he doesn't focus so much about one year's weather," says Schrader.

The field of 27 bidders included investors but was dominated by farmers, according to Schrader. "Even as we got over $10,000 an acre, we still had several farmers competing for the land. In recent months, the buyers of about three-fourths of our land have been farmers."

In addition, 160 acres of Rush County, Kan., farmland sold Monday for $2,200 an acre. The central Kansas dryland farm located north of Larned featured 123 tillable acres and a 56-acre wheat base with a farm program yield of 30 bu. per acre. Carr Auction & Real Estate, Inc., Larned, Kan., handled that auction. The firm also handled a July 10 auction of 160 acres of Edwards County irrigated cropland which brought $4,280 an acre. The farm, located southeast of Belpre, had 158 tillable acres and a 140.5-acre corn base with a yield of 126 bu. per acre. The tenant owned all irrigated equipment.

We could also cite examples of sales that seem a little soft. That's to be expected as some farmers become more cautious in the face of a yield-cutting drought. But if the right property comes available, there is still plenty of demand and cash available to keep prices stable as these recent examples show.

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

Value of U.S. Farm Real Estate Posts 11% Annual Gain

Aug 03, 2012

Mike Walsten

The value of all U.S, farm real estate (the value of all land and buildings on farms), rose 10.9% in 2012 from revised 2011 figures to $2,650 an acre, according to the U.S. Department of Agriculture. Its annual survey found farm real estate rose the greatest in the Northern Plains, up 26.7%, but fell 4.1% in the Southeast region. The highest farm real estate values were in the Corn Belt region at $5,560 per acre. The Mountain region had the lowest farm real estate value at $974 per acre.

U.S. cropland values increased by $450 an acre (14.5%) to $3,550 per acre. Cropland rose by 31.1% in the Northern Plains and 18.5% in the Corn Belt regions, USDA says. However, a decline of 3.8% was reported in the Southeast region.

The U.S. pasture value increased to $1,150 per acre, or 4.5% above 2011. The Southeast region had the largest percentage decrease in pasture value, 7%, while the Northern Plains had the highest percentage increase at 21.9%.

Link to full report:

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

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