Iowa Land Auction Prices, March 6-12, 2020

Posted on March 16, 2020 at 10:34 AM by Jim Rothermich

It was a busy week with 3,169 acres auctioned, of which 1,682 were tillable. The grain and livestock markets are very nervous with the coronavirus pandemic. I have had several questions over the weekend as to how all this market volatility will affect land prices. In my opinion, land prices should remain stable. Stock market volatility will add to the pool of buyers wanting to buy a more stable investment, and land is where they want to park this money. The Federal Reserve cut prime interest rates to the lowest they have ever been. This will be supportive to the land market. 80% of land in Iowa carries no debt, which is also supportive. Fuel prices are the lowest they have been in decades and this will greatly reduce input costs. Yes, grain and livestock markets are down, but this is considered short term.

I visited with an auctioneer that sold a farm estate with160 acres of good quality cropland and a nice line of farm equipment in southwest Iowa on Saturday, March 14. He stated a huge crowd showed up in the rain and snow and the land sold very well while the farm equipment sold even better. The auctioneer also said he and the sellers were very happy with the results and there was no weakness in any of the sale prices. The same auctioneer recently had a sealed bid cash rent auction and would not disclose the rent prices, but said they were “very healthy.” I talked to a realtor who also recently finished a sealed bid cash rent auction, and they would not disclose the rent prices but stated prices met expectations and they were very pleased with the results. I am reporting this as stable cash rent equates to stable land prices. Quality will be king in this environment. Good quality farms will sell well. Farms with inadequate drainage and/or low farming efficiency or another blemish will be discounted.