Three auctions the past six weeks in Benton Co., Iowa, show the wide variability being seen at auctions as buyers stretch for quality but retrench on lower-quality ground. Benton County is located just to the west of Cedar Rapids and features rolling terrain ideal for cattle as well as high-quality level cropland.
The bell-ringer came March 7 as 200 acres went to market located a half-mile northeast of Atkins, straight west of Cedar Rapids. Improvements included a barn and three grain bins. This was high-quality ground for the area. It was 97% tillable with 194 tillable acres. It had a CSR2* rating of 85.8. Using the old CSR rating, the soils rated 78.6 compared to the county average of 72.8. Bottom line: Well-above average ground for the area, level, easy to farm and lots of it. It brought $13,600 per acre or $158.50 per CSR2 point. It was a rare property in an area that had not seen much land come to market.
Following that on March 12 was an offering of 104 bare acres on the north edge of the small town of Norway. This is an area more prone to rolling ground and cattle operations. Of the 104 acres available, 89.5 acres were tillable -- 86% tillable. The CSR2 was 72.3 and the old CSR was 69.0, well under the county average of 72.8. It brought $8,000 an acre, or $110.65 per CSR2 point.
The final occurred a month later on April 17. It was 160 acres located 4 miles northeast of Belle Plaine. It featured level terrain and 149 tillable acres -- 93% tillable. The soils were high quality with a CSR2 of 83.0 and an old CSR of 76.84. It also had an abandoned building site with concrete located down a lane inside the 160 acres. It brought $10,700 an acre or $128.91 per CSR point.
Observations: The March 7 sale brought a 23% premium per CSR point over the April 17 auction due to its higher quality, higher percentage tillable and clean bin site. In addition, May corn futures also completed a near-two-month rally and spiked $5.00 for the first time since September 1 that day. That's a great combination for the sellers--top-quality ground and surging grain prices.
The March 12 property was a below-average piece of ground and was discounted 30% from the March 7 auction as a result. We suspect the discount would have been much less if the auctioned was held a year earlier. In addition, May corn futures had backed off 15 cents by the day of the sale.
The April 17 auction was possibly discounted because of the abandoned building site in the middle of the property. And a little more land may have turned over in that area recently, which may have satisfied some demand.
All three properties were handled by Troy Louwagie, ALC, Hertz Real Estate Services, Mount Vernon, Iowa.
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