Farmland Insider: A wild few weeks in Northwest Iowa
Constant demand for farmland plus higher grain prices is a great combination for folks selling farmland in northwest Iowa.
In the last two weeks, Mark Zomer, auctioneer and owner of Zomer Realty and Auction of Rock Valley, Iowa, has had five farmland auctions in Lyon and Sioux counties in Iowa, each performing better than the one before. Take a look at these sales:
- 84.59 acres west of Alvord in Lyon County on Jan. 19: $16,800 per acre
- 76.18 acres southwest of Inwood in Lyon County on Jan. 13: $14,100, and a 28-acre tract that sold for $13,400.
- 137.04 acres north of Hull in Sioux County on Jan. 12: $12,100 per acre
- 75.62 acres southwest of Sioux Center on Jan. 11: $14,300 per acre. A 44.72-acre tract sold that day for $11,000 per acre.
That’s a pretty good run of farmland sales, Zomer says.
“There appears to be a lot of optimism,” he says.
There’s more to it than that, of course. Commodity prices are much more prosperous now than four months ago, so farmers are feeling more optimistic. Plus, growers benefitted from Coronavirus Food Assistance Program (CFAP) payments, plus other federal farm programs.
But Zomer points out this area of Iowa has a prolific livestock industry, so farmers need places to spread manure and grow livestock feed.
“This area of Iowa is a great place to live and raise a family,” he explains. “There are a lot of family farmers who want to grow for the next generation to farm.”
And of course, there is limited opportunity to buy farmland. “When it comes to land sales, you usually only get the opportunity to buy farmland one time,” he says.
According to Iowa State University, cash rent for land in northwest Iowa averaged $239 per tillable acre in 2020. That’s $17 higher than the statewide average of $222.
The pandemic forced Zomer to change the way in which auctions are held. All land sales are live, on-site. There is a digital sign which displays the bids. Bidders stay in the vehicles, while ring men are on hand to call bids. All signatures are conducted electronically after the sale. COVID-19 did not impact the demand for land; Zomer was busy throughout 2019.
The four sales – details of which are listed below – all exceeded Zomer’s expectations.
We’ll learn more about the farmland demand in his area in coming weeks, as he has a sale of 195 acres in Sioux County, Iowa, on Jan. 26; 57 acres in Lyon County on Feb. 4; 164 acres in McCook County, South Dakota, on Feb. 5; and 277 acres in Lincoln County, South Dakota, on Feb. 9.
- January 19, $16,800 per acre. The 84.59-acre tract has 81.71 tillable acres, with the rest in road/ditch. Soil types are mainly Moody and Trent, and the tract has a Corn Suitability Rating 2 of 71.1 (based on a scale of 1 to 100). The land was sold to settle an estate, and purchased by a farm family.
- January 13, $14,100 per acre. This 76.18-acre tract has 73.20 tillable acres, with the rest in road and ditch. Soil types include Moody and Trent, and the average CSR2 is 67.4. The land had been owned by a local farm family for more than 60 years, and was sold to settle an estate. There were three tracts in the sale, all of which were bought by local farmers. Tract 2 was 27.95 acres, all tillable, which sold for $13,400 per acre. Tract 3 included 55.10 acres of grass, selling for $4,100 per acre.
- January 12, $12,100 per acre. This estate sale had $137.04 acres, with 132 acres tillable. The soil types include Galva, Primghar, and Radford, with a CSR2 of 86.3. This farm was bought by an investor who had other holdings in the area, Zomer says.
- January 11, $14,300 per acre. This tract was 44.72 acres, mostly all tillable. It has Colo and Galva soils, with an average CSR2 of 86. A second tract on this sale totaled 30.90 acres, with 29.47 acres tillable, featuring Galva and Colo soils and a CSR2 of 84.9.