Farmland Auctions: A Wild Day in Southeast South Dakota
Prospective landowners in southeast South Dakota had a teriffic opportunity to buy farmland on November 14.
Peoples Company, a Des Moines-based auction firm, offered more than 5,000 acres of farmland at auction near Centerville in Clay County. Meanwhile, 41 miles away in Hutchinson County, Wieman Land and Auction offered an 80-acre tract of land at auction.
The odds of both auctions reaching the same buyers is minimal. But it’s an interesting contrast to the type of land for sale, and the type of sale conducted.
Wieman’s Auction featured 78.03 acres of tillable land, located a mile east of Freeman. The land features mostly Class II Clarno Bonilla and Tetonka silt loam soils, with a Soil Production rating of 81.9 (based on a scale of 1 to 100). It is an east-west 80, with a low spot that floods in wet years. However, in normal years, the land is all tillable. The seller was an out-of-state landowner who had cash rented the property for years.
It was a straightforward auction, over in less than an hour, with the winning bidder buying the property for $518,900 ($6,650 per acre).
“It was a pretty strong sale. The winning bid was a little more than we expected,” says Nathan Timmerman, broker and auctioneer for Wieman Land and Auction. But an 80-acre piece that is all tillable is an attractive offering to neighboring farmers, he adds. Three bidders were in on the action, and a neighboring farmer bought it.
Meanwhile, 45 minutes southwest of Freeman, Peoples Company auctioned a whopping 31 tracts totaling 5,302 acres at a mix-and-match auction held at the Beresford Golf Course and Community Center. In all, 10 buyers bid a collective $23.048 million on the tracts, which ranged from a 7.99-acre farmstead to 9.39 acres with 195,000 bushels of grain storage, to a 522-acre tract with irrigated farmland, three pivots, and grassland. Plus, everything in between, including “…2,000 acres of as good of farmground as you’ll see,” says Steve Bruere, president of Peoples Company.
The company sold each tract individually, and then came back to allow buyers to mix-and-match the properties they wanted. This concept takes some getting used to at first, but it was effective.
Bruere was joined by realtor Andrew Zellmer to handle the day’s activities. Clocking in at 10 hours, it was more than a day-long event and as such, Peoples Company catered in both breakfast and lunch. Yet, at the end of the day, each tract took 16.5 minutes to sell, Zellmer says.
In all, the sale included 4,317 tillable acres, with mostly Egan-Clamo-Trent soils, Egan-Clamo-Chancellor soils, Lex Clay loam soils, and Dalesburg-Dimo soils. Much of this ground was irrigated, with 42 center-pivot systems watering 3,200 acres.
The land is mostly south of Centerville, on either side of South Dakota Hwy 19.
The owner of the property is listed as MetaBank, but Hansen Irrigated Farms, LLC was the previous owner. It was a “deed in-lieu of foreclosure” sale, meaning that the landowner turned the deeds back to the bank rather than being foreclosed upon. The previous owner was a businessman who rented the land out to neighboring farmers.
The sale was broadcast live on Twitter, and viewers were treated to a complex, robust auction.
Here are some highlights:
- One buyer bought nine tracts, totaling 1,182.47 acres, for $2.955 million ($2,499.01 per acre.)
- Another buyer bought eight tracts totaling 1,722.23 acres, for $5.915 million ($4,434.50 per acre). This tract included the grain handling facility.
- The high bid per tillable acre was $7,880.86 on three tracts totaling 845.72 acres. That buyer spent $6.665 million.
In all, there were 90 registered bidders. Buyers were a combination of investors, local farmers, and landowners using the 1031 Exchange to acquire this land. In addition, there was a 3% Buyer’s Premium on each tract.