Farmland Auction: Floyd County, Iowa, Sale Includes Whopper Cash-Rent Opportunity
Every farmland auction is unique, and the sale of a tract in Floyd County, Iowa, on September 17 was one of the more unique actions I’ve ever seen. The buyer of this property also had the opportunity to cash-rent more than 740 acres for three years.
More on that in a moment.
Up for sale was 80 acres of good-quality land, 3 miles northwest of Marble Rock in northeast Iowa. The tract has 74.7 acres of cropland, mostly Saude and Waukee loam soil, with a Corn Suitability Rating 2 of 70.4 (based on a 0-100 scale). Of the farmland, 22.6 acres were enrolled in a CRP contract, paying $5,109 per year through 2025.
This tract includes a three-bedroom house, remodeled within the last decade. Highlighting the farmstead is a turnkey grain farm setup, with 170,000 bushels of storage with a Sukup grain dryer, a 60×80-foot machine shed, a 56×90-foot machine shed with shop and concrete floor, and mature landscaping.
Furthermore, the winning bidder would have the right of first refusal on cash-renting six tracts, totaling 744 acres, all within 7 miles of the farmstead. The seller – Ott Grain Farms, Limited – wished to retire, so the auction represented an opportunity to do just that.
More For the Money
“My son came with up the idea for the buyer to have the option to farm the rest [of the ground,]” says auctioneer Dennis Behr with Behr Auction Service based in Rockwell, Iowa. “He thought it might help sell the 80, and it sure did.”
Going into the sale, the buyers knew they could have the chance to sign a three-year lease, for $285 per acre, beginning in 2020. The six farms ranged in size from 67 acres to 210.2 acres, with CSR 2 ratings of 69.6 to 90.9.
“It was a turn-key operation,” says Behr.
When the sale started, the bidding was fast and furious, he adds. “There were six bidders going after it from the beginning. It was bang, bang, bang,” Behr says.
When the gavel fell, the 80 acres sold for $1.32 million, or $12,500 per acre. The value of the home, grain bins, and buildings skews the actual selling price of the farmland somewhat, Behr admits.
That the seller was interested in cash-renting his property made this sale unique and attractive to buyers seeking to bring another generation to the farm, Behr adds.
“It was a pleasant surprise for everyone involved,” he says. “The buyer – and definitely the seller – was pleased.”