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.
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