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Sligh1

Sligh1

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http://www.rlifarmandranch.com/docs/Fall 2014 Survey Report.pdf

You can read the written report as well. 8.8% loss for the year. honestly, not real interesting for me. The next year will be interesting though. I could care less personally if prices fell and actually sort of hope they do. IMO - we'll always see rises & falls and long term the prices will continue to rise. Price reduction means some better deals coming if we see significant reductions.

On the 8.8% reduction, overall, no biggy, nothing that will be too earth shattering to most. Not a big hit either when you consider the massive gains year over year for many straight years. What you guys "predict" for 2015? 10% correction? Timber & rec stayed pretty consistent and nothing too drastic there either. My opinion being the rec ground will more closely follow the economy but does get impacted to some degree with ag ground prices or grain prices. Wish I had the crystal ball on corn & bean prices in next few years, that's maybe the area I care a little more on. :)
Anyways, just thought I'd post the most recent report. Kinda fun watching it. Kinda nice not caring either :)
 
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I think the trend will continue for the next 2 years or so. Hawkeystatehogs makes a great point.

The only thing I think is hard to out your finger on is 25% off of what? A lot of "rec" ground has traded in the 3-3500 range in the last year and a half. There is also a ton that has been 1800-2500.

Everything is so variable that it's hard to really put your thumb on it. General trend - soft to bearish. But nothing too major happening, as there just won't be many transactions made in this downturn. Land is not as liquid as those who invest like to believe. Most of the investors in rec ground get satisfaction from owning it and will just grin and bear it and kill big deer :D look what is listed for sale right now. Not a whole heck of alot and what is listed, are a lot of latecomers who missed the boat (judging by some of the prices).

You have to remember the people who buy/own the ground we always talk about and these people for the most part, don't depend on the value of their ground.

I truly believe that the only ones who will get upside down in this whole thing (in terms of rec ground) are the ones who bought too much hoping to spin a few pieces off. Because the demand is just not out there right now.

Bears and bulls make money, and hogs get slaughtered.
 
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Corn at this level will result in more correction. Plus anytime the market is hurting some outsiders just stay away.

Straight cash will buy farms, but if it's financed the banks will be more cautious.
 
Prices

HorseDoctor said:
For the vast majority of folks on this forum, this is far & away the most relevant statement made yet concerning land purchase!
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Agree, but that does not make the market whole. A land market will fluctuate based on several factors. Personal use is one, but actually interest rates/economy/cash flow/corn/bean prices/cattle prices will have more influence.

If you are never going to sell, well then it really doesn't matter what it is worth! In my opinion this is good, it will allow more hunters on this forum to buy a farm in the future. Go lower!
 
Weather will make or break the next few years. Crop input prices haven't changed, so 2014s crop will over run into the next few years. One dry year 2016 could help the prices. Cash rent will have to be reduced to even make money. That alone will drop ground prices. Rec ground seems to be stable . Cattle will hold up pasture for now but even that will cycle when the herds get built back up in the other states.
 
gundog870 said:
You have to remember the people who buy/own the ground we always talk about and these people for the most part, don't depend on the value of their ground.
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It is easy not to depend on the value of your ground when it continues to go up but when it has a multi year correction that seems to change.

gundog870 said:
The only thing I think is hard to out your finger on is 25% off of what? A lot of "rec" ground has traded in the 3-3500 range in the last year and a half. There is also a ton that has been 1800-2500.
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JMO...If you are buying rec ground at 3500 an acre you are entering into the greater fool area. 1800 to 2500 is a realistic number to determine the starting place for a correction. My guess is 1400 to 1700 when it's all over. Fear could push it lower.
 
Hard to put a price on "rec land". Because - its not an equal commodity.... Some has 60% tillable, some has none. Some has csr's in the 60's while others r 20's. some layout amazing & r in heavily managed neighborhoods while others have crap layouts & horrible neigbors. So many variables that its impossible to say certain general categories of land should be at xyz price.
 
Talked to my farm credit today and they are seeing BIG drops in rec ground prices in last 6 months.
 
That's what i thought, but talked to a land realtor who is a friend of mine and this year was his best year ever... Hard to believe but it's true...
 
Continue to drop for ag and rec ground. Everything corrects and cannot continue to see huge jumps in prices every year.

Rec will go down to 1200-1700 in the coming years is my prediction.
 
letemgrow said:
Continue to drop for ag and rec ground. Everything corrects and cannot continue to see huge jumps in prices every year.

Rec will go down to 1200-1700 in the coming years is my prediction.
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I know people would like to see this but its not going to happen. Most rec ground has been bought and sold over and over. Unless you find a piece where this isnt the case or a landowner died and his family is selling it do you really think people are going to sell there hunting properties for a big loss. Most of our rec ground still has nice crp payments too.
 
chipterp said:
I know people would like to see this but its not going to happen. Most rec ground has been bought and sold over and over. Unless you find a piece where this isnt the case or a landowner died and his family is selling it do you really think people are going to sell there hunting properties for a big loss. Most of our rec ground still has nice crp payments too.
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Maybe if the farm was bought in the last 5 years. You have to remember it was less than a decade ago that $1200/acre bought the whole farm including tillable averaged into it. I personally don't see prices going back to $1200, but $1700 yes.
 
10 years ago we were buying farms that were half rec and half tillable and they were not getting bought for $1200 an acre.
 
chipterp said:
10 years ago we were buying farms that were half rec and half tillable and they were not getting bought for $1200 an acre.
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Corn also was not going to go down to $3 this year either. We shall see :D

I don't see prices going that low for all rec ground. Those really rough acres tho very well could, especially if interest rates go up and up.

Cash will be your friend then and you can get steals on land since the principal goes down and interest rates go up.

Bought my place, not on the market, in 2004. People would have called me an idiot for paying 1200 per acre. I paid more than the going rate was at that time, but it was not even close to 1200. Farm produces 40 bushel beans, which is pretty good for my area...60-70 bushel per acre is king here.

Something will correct with cash rents in the coming years. Some farmers will lose their butts with $3 corn and with rents the way they are now and inputs. Farms wont look so lucrative to investors as they have been the past few years. Just my thoughts...
 
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Again, "rec" is ground such a broad generalization. I have a friend that has a 240 acre deer hunting/hobby farm. He is farming some of it, but again it is just for "recreation." That farm is worth probably $8,000 an acre today.

So what are you saying is going to get to $1200-1700? Just set aside junk timber? Or a 120 with 40 acres of tillable that has $10,000 in income?? Both are Rec/combo farms.


How many of you that own farms intend on selling your property in this type of environment? Or in the next 2 years for that matter? I doubt that there are too many. I truly believe that the supply of "rec" property in the next two years will keep this thing in check for those properties that actually transact.

For those that are putting your farms on the balance sheet for other purchases, it won't be as fun.
 
Just added up the properties Whitetail Properties (just picked a site) has for sale in All of Iowa today... 85.... Not much inventory there. I bet it was double that 2 yrs ago at this time.
 
gundog870 said:
Again, "rec" is ground such a broad generalization. I have a friend that has a 240 acre deer hunting/hobby farm. He is farming some of it, but again it is just for "recreation." That farm is worth probably $8,000 an acre today.

So what are you saying is going to get to $1200-1700? Just set aside junk timber? Or a 120 with 40 acres of tillable that has $10,000 in income?? Both are Rec/combo farms.


How many of you that own farms intend on selling your property in this type of environment? Or in the next 2 years for that matter? I doubt that there are too many. I truly believe that the supply of "rec" property in the next two years will keep this thing in check for those properties that actually transact.


For those that are putting your farms on the balance sheet for other purchases, it won't be as fun.
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Exactly, if you're not selling what does it matter. My opinion is that of the higher quality "rec/combo" farms are in a niche of their own. There will always be the big out of state money guys wanting the rec pieces in the high quality neighborhoods regardless of the prices. Those pieces of ground don't follow grain prices or the markets. Have worked with a whitetail properties agent and he as well has sold a record amount of acres this year and it doesn't sound like its the lower quality stuff.. Just my .02 :)
 
I get a kick out of the term rec ground. Most of it is small farm ground that didn't make it through the 80's. The large crop farmers bought these farms and took the best land for crops; then sold off parcels that weren't worth their trouble to tile or terrace. These drainages or poor soil acres are now considered rec ground for whitetail hunting. I remember when you could purchase such land for as little as $200 an acre. Today everybody wants to grow whitetails in Iowa. Rec ground will get what ever the richest fools are willing to pay. If farmers weren't interested in investing into this rec ground with $7 corn; it will make little difference with $3 corn. This rec ground land is not driven by crop prices or farmland value.
 
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