We are fortunate to live in a free country where private ownership of land is a right. That right is ingrained in us. And for many of us growing up on the land, we cherish the memories generated from working and playing on the land. But with the ownership right came an obligation to care for the land. As both my grandfather and father used to say, "leave it in better condition than the way you found it." Beyond all the emotional satisfaction that owning land provides, farm and ranch land probably represents the largest financial asset you'll ever own. This blog will focus on all of these aspects of "Your Precious Land." Read on, and if you have any comments, email me at landowner@profarmer.com

No let up in demand for prime Central Illinois farmland

If you were wondering how the July sell-off in corn prices might impact demand for land, wonder no longer. At an auction yesterday, August 1st, near Bloomington/Normal, Illinois, 827 acres passed under the gavel for an average price of $7,777 per acre. The offering consisted of three farms. Two were located northeast of Normal and one was located southeast of Bloomington. The three farms were broken into nine parcels and offered for sale. One of those parcels was a small house located on a 2.79 acres. If you remove that parcel from the sales total, the farmland averaged $7,708 an acre.

The highest-selling tract, totaling 165.44 acres, sold for $9,500 an acre and the lowest-selling tract, 62.31 acres, brought $4,950 an acre. That 62.31-acre-tract was only 70% tillable, says Dave Klein, vice president and managing broker, Soy Capital Ag Services, Bloomington, 309-665-0961, whose firm handled the sale.

"The combination of Class A soils, an outstanding production history and relative location all factored into this new high," Klein says. "Good management and adequate drainage improvements were also important positive attributes. A good portion of this farm had been in the family for more than 100 years."

416.27 acres of prime farmland located between Normal and Towanda averaged $9,259 per acre. 131.47 acres east of Towanda that contained a lower percentage of tillable acres and Money Creek averaged $5,550 an acre. Two farmland tracts northwest of Leroy were sold for $6,400 per acre.

The auction drew 88 registered bidders and a crowd of about 180 people, Klein says. Successful bidders ranged from outside investors, some with and some without 1031 tax-deferred exchange money, to local farmers -- again some with and some without 1031 money. Investors bought three of the eight farmland tracts offered. Local farmers bought the remaining five -- three of which used 1031 money and two of which did not, according to Klein.

I cover interesting sales like this one in LandOwner Newsletter. If you're interested in seeing a copy, email or call me at 800-772-0023. I'd be happy to email a copy to you.