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Farmland Auction: $18,300 is Top Bid for Northwest Iowa Farmland
There are some land sales that boil down to the old real estate maxim location, location, location. The October 11 sale of two tracts totaling 209.88 acres in Sioux County, Iowa, is a perfect example.
“That about sums it up in less than 100 words,” says Del Beyer, broker at the Iowa Auction Group, which had the sale. The $18,300-per-acre selling price for one of the tracts is the highest we’ve written about in more than five years. To be honest, this auction passed us by when it first happened, but generated quite a discussion on the social media channel, Twitter.
There were two tracts for sale:
- Tract 1, 66.68 acres 2 miles east of Sioux Center, has 61.87 cropland acres. Soils are mostly Galva silty clay loam, with a Corn Suitability Rating of 94.6 (based on a 0 to 100 scale); they drain well and have had manure applied. It sold for $1.22 million ($18,300 per acre).
- Tract 2, a mile north of Sioux Center, has 143.2 acres, with good drainage and manure applied. There are two “chunks” on the west side that impact farmability to a degree. Soil types are mostly Galva silty clay loam, with a CSR 2 of 93.4. Tract 2 sold for $1.933 million ($13,500 per acre).
Beyer says the location of the property was key. The sale settled an estate, so these farms had not been for sale for generations. By the time the gavel fell, a neighboring farmer had bought Tract 1 and an investor bought Tract 2.
The auction was well-attended, and bidding was quick-fire.
“It was standing-room only, although there were way more itchy noses than bidders,” Beyer says.
Tract 1 started at $9,000 to open, and got to $15,000 before it slowed down. By the time the gavel fell, the high bid was $18,300, which could very well be the top price we see in Iowa this fall.
Why so high?
Northwest Iowa is unique because of its strong livestock influence. “We have more manure than we have land,” says Beyer, explaining that farmers need farmland on which to spread manure on their farm fields.
Plus, yields this fall have been better than expected, with soybean yields ranging from 50 to 70 bushels per acre, and corn yields topping 200 bushels per acre. Given the extreme wet conditions from fall of 2018 and spring 2019, the good yields are a pleasant surprise.
Long-term corn yields in Sioux County are 194.7 bushels per acre; soybeans, 59.9 bushels per acre, according to Iowa State University. The county’s average CSR 2 score is 85.3, and cash rent averages $267 per acre, according to ISU.