ReinertsonTaxidermy
Well-Known Member
Just went to an auction yesterday. 120acres 50timber70tillabe Not so great csr with way better hunting than farming for sure. It went for 4150/acre. Unreal. Same time last year a way better farm went for 2250/acre right down the road. I'm gonna keep saving my money so when the bottom drops out I'll get a smoking deal on one of the many fire sales.
Hardwood11
It is going to be a good fall!
There will be some fire sales some day, be ready with cash!
You all have same opinion as me. As I've said before.... "Be greedy when others are cautious and cautious when others are greedy" (Warren Buffet).... Farm land (not hunting land!!!) is at record highs right now and some of the deals are foolish at best. The wealthy guy or farmer paying cash for 300 acres at $10,000/acre- doesn't matter- he'll be fine even he pays double what he should. what will happen is some of the newer farmers that are heavily leveraged will collapse and it will impact all the ground prices for all farmers- just like when 10% of folks started getting major foreclosures on houses.... The whole market took a crap. again, if you pay cash and don't care if ground goes down- no biggy BUT I sure won't be buying farm land at record highs BUT I will be buying more hunting land (combo land) as I PERSONALLY don't have the same thoughts/concerns on hunting land.
hillrunner
PMA Member
An 80 about 20 miles from me brought 20,000 an acre last week. New state record they said. I haven't seen anything under 10,000 this fall, most is closer to 15. Timber ground isn't very common around here but you'd be dang lucky to get it for under $2500 an acre with no tillable included.
AIRASSAULT
PMA Member
farm ground around me is going around $6000-$7000/acre right now.. Ive seen two different auctions in the last year or two of timber ground that went for 1100 and 1200/acre, BUT, they were both river bottom ground along the cedar.. One of them is up for sale again and it is double the price now on mossyoakproperties.com... 2200/acre still isn't too bad, but, does get flooded pretty much every year... a lot of big bucks around there though
risto2351
Well-Known Member
Be greedy when others are fearful and fearful when others are greedy (Warren Buffet).
Come on Sligh get it right.
I am impressed that you have heard of it though. :way:With rates where they are right now I am trying to buy as much as I can. I do not have the slightest idea how I will be able to pay for it but I will get it done. :way:
Last edited:
Crimson Arrows
Well-Known Member
These prices seem to be ag mostly, but seems "hunting" ground is pretty good right now, at least as good as Ive seen in awhile.
I dont think we will ever get lower on purchasing ground to hunt, but could go up quite a bit if tag allocations change or more and more ground is developed.
I dont think we will ever get lower on purchasing ground to hunt, but could go up quite a bit if tag allocations change or more and more ground is developed.
BINGO! Folks always combine hunting with Ag land. NOT the same thing! Yes, some similarities and some echoing/ripples when one or the other drops- impacts the other. Hunting land is STILL at a bargain rate right now. At least VS 4-5 years ago. Could it go lower? of course. Could it sky rocket up? Absolutely. Does anyone know FOR SURE what will happen in future? Nope. Lot of variables could impact price BUT personally, I am comfortable and major desire of more hunting land while I'll leave full Ag land to you other fellas.
AIRASSAULT
PMA Member
If they get rid of tax exemptions for Forest Reserve areas, I fear that farmers will be dozing more and more timber ground down so they can farm it, in turn, driving the price of other hunting ground way up... I hope this doesn't happen though!
loneranger
Well-Known Member
Since I have been visiting more and more, around SE Iowa, I have come to the conclusion that just about every piece of ground that is not actively farmed is,,,Hunting Property! It is amazing!
LoessHillsArcher
PMA Member
Ahh yes, never thought of this but I can easily see that happening... a LOT!
As has been noted in various articles, a much greater percentage of the land being purchased currently is being bought for cash vs. the 70's-80's when it was highly leveraged, therefore the prices/values are not as volatile. The ones who have more to risk are those paying cash rents of $500-600/acre.
Buck Junkie
New Member
I am going to respectfully disagree on a couple of items from previous posts. I'm in the ag finance business and I dont beleive "most" of these farms are beeing bought with cash. I pay close attention to the local county records and I can assure you more than 50% of the purchases are being mortgaged (in my area). It's nearly impossible to say guess the average LTV, but from what I see in probably near 40 to 50%.
There is a GSE (Government Sponsored Enterprise) willing to loan up to $5400 per acre in my area. Obviously there are other underwriting requirements to take into consideration, but assuming $5400 per acre at 5% interest for 20 years and you will have annual payments of $433/acre for the next 20 years. Add in property tax and it will be another $20. With inputs runing around $550 this brings your total cost to $1,003. Dec 2012 cash corn as of today is $4.85 , which means under these assumptions that farm is going to need to produce 207 bu per acre to breakeven! That farmer is now locked into these payments for the next 20 years (although he could sell the land at some point)
I would rather loan the farmer money to rent a farm for $500 for one year, because after the lease is up he could always walk away. I have no idea what prices for corn/soybeans, yield gains, input cost are going to do over the next 20 years, but I can assure you farming in not always profitable and there are multiple years where farmers operate without generating any profit. It is that environment when these operators will need to lower there cost quickly.
As to the CNN link-The guy being interviewed appeared to be a developer speculating on developable gound outside of a metro area, which is a whole different beast!
There is a GSE (Government Sponsored Enterprise) willing to loan up to $5400 per acre in my area. Obviously there are other underwriting requirements to take into consideration, but assuming $5400 per acre at 5% interest for 20 years and you will have annual payments of $433/acre for the next 20 years. Add in property tax and it will be another $20. With inputs runing around $550 this brings your total cost to $1,003. Dec 2012 cash corn as of today is $4.85 , which means under these assumptions that farm is going to need to produce 207 bu per acre to breakeven! That farmer is now locked into these payments for the next 20 years (although he could sell the land at some point)
I would rather loan the farmer money to rent a farm for $500 for one year, because after the lease is up he could always walk away. I have no idea what prices for corn/soybeans, yield gains, input cost are going to do over the next 20 years, but I can assure you farming in not always profitable and there are multiple years where farmers operate without generating any profit. It is that environment when these operators will need to lower there cost quickly.
As to the CNN link-The guy being interviewed appeared to be a developer speculating on developable gound outside of a metro area, which is a whole different beast!
There very well may be more folks paying cash, but Buck Junkie would sure have more insight than me on that and maybe there just isn't. I actually don't think it'll make a huge difference in either case though..... If one were to look at similarities in housing- it only takes a smaller % to have trouble to ripple through everything. Even if 5% have trouble with their land, it can create problems. The other problem... Grain prices collapse- we have a majority of farmers out there who are renting ground at super high prices. PLUS, you add to it all the folks who just rent their land to these guys at these high rates and all the sudden their $300/acre farm rent expires, can't be paid OR needs to be adjusted to $125/acre- whoa, we got some major corrections coming if that happened. Lot of "IF's" and "when's" out there that we'll just have to wait and see on.
Hardwood11
It is going to be a good fall!
We are probably going to get an all asset pull back, in other words, stocks, bonds, oil, corn, soybean, silver, gold, the markets drop all across the board, not based on demand or anything...It happened in 2008, that is when the rec land market dropped.
If that happens again, farm land will not be supported by grain prices and the "Pop" will start to fizz. It sounds like some banks are already very concerned and they are requiring more money down.