View from the Cab: Land for sale
By: Kent Casson
If you glance at the classifieds these days, it seems all you see is land sale advertisements.
One ad in a recent publication touts, “nearly all-tillable, productive Class A farmland” while another describes a “tremendous opportunity to purchase a highly productive, all-tillable Class A farm.” I particularly enjoy the ad which mentions “excellent recreational opportunities.” I’m sure the possibilities are endless.
Many question if the farmland price bubble will burst anytime soon and I don’t think it will just yet. We are seeing strong farmland prices throughout the Midwest – especially in those high producing areas. One local farm sale to our south brought about $16,000 per acre last week. I also recall hearing about a record-setting land sale in Iowa not too long ago.
I am always careful not to itch my nose at a farmland auction as some may think I am actually bidding on land. I have never been one involved in a “bidding war” but I hear they can get downright nasty – even between neighbors and sometimes friends. These “bidding wars” are likely what keeps driving up the price of local farmland.
Ag land values in the Federal Reserve Bank of Chicago’s district increased around seven percent from April 1, 2020 to April 1, 2021. This district covers the northern two-thirds of Illinois along with Michigan, Iowa and Wisconsin. Many segments of the U.S. economy felt inflationary pressure and this impacted the farmland market in 2021.
Farmland values saw the largest gains in eight years as they climbed 14 percent in the Chicago Federal District.
The Illinois Farm Bureau reports farmland values between 2020 and 2021 increased an average of four percent in Illinois, 10 percent in Iowa and eight percent in Indiana. June saw record highs for Indiana farmland values with an average per acre price of $9,785 for high quality farm ground. This is according to the Purdue annual farmland value and cash rents survey.
The mid-year survey of Illinois Society of Professional Farm Managers and Rural Appraisers showed farmland values jumped 20 percent around Illinois during the first half of 2021. It marks the fourth time since 1970 values exhibited an increase of that amount or higher. These results were released late in the summer during the annual Farm Progress Show in Decatur.
Hang on because it will likely continue to be a crazy land value ride for the foreseeable future.