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Wow Just Wow....... Land Prices

T

Trapshooter1

Well-Known Member
3 tracts just sold on auction in the last week. Needless to say the land market hasn't softened much....like I thought it would have.
P1 36.5 acres 74.5 CSR2 all tillable 22,500/acre. Had some light ground on the farm
P2 79 acres 70 Tillable 78 CSR2 Mix of Tillable, CRP and a creek. 13,300 on everything or 15,010 on what can be made farmable. A bunch of sand on this Tract.
P3 80 acres all tillable, 85 CSR good farm. Best farm on the sale. 16,100 and IMHO the best deal, it needs nothing.

It's just hard to believe the lower commodities and higher interest rates haven't pushed things lower. But their must still be a bunch of cash out there looking for a home.
 
Still goes back to the INSANE amount of profitability realized by majority of farmers back to 2020. $400 to $700 per acre profits and that is IF the land was not owned outright. There are some DEEP pockets now in the farm sector. Not all of course but enough to keep land prices high.
 
Muskrat24 said:
Still goes back to the INSANE amount of profitability realized by majority of farmers back to 2020. $400 to $700 per acre profits and that is IF the land was not owned outright. There are some DEEP pockets now in the farm sector. Not all of course but enough to keep land prices high.
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I totally agree ^^. The land market is definitely softer now than 1-2+ years ago, as potential buyers that are influenced by lower commodity prices and/or higher interest costs have been shaved back. But the dudes with cash...still have cash, for the most part AND as IowaBowHunter said...that is before some buyers show up in the market looking to "lock in" their stock market gains.

Yes, there are more "Price Reduced" notices to be found nowadays, but IMHO most of those are associated with land that has one or more limiters. The really good pieces are still moving well and at prices that are still around all time highs.

It is also true that it is hard to gauge the "market" when there is a neighbor that wants a piece of ground. They may well pay over market to get a piece that may only be available to them once in their lifetime, etc. Meanwhile, other factors may limit the price paid. I just yesterday added a few acres to my land portfolio and paid under market since it was essentially landlocked. Realistically, the pool of buyers was the 3 people that bordered it.
 
Windwalker said:
Been a couple of years ago some timber ground brought 10k a acre.I think Decatur Co.
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Neighbor's 80 acre of mature oak timber was listed for sale in Johnson Co for $1M but didn't sell due to lack of easement to subdivide it. They've done some selective logging for cash flow. For the right price, I think I might know someone who could sell an easement. ;)
 
250 acres (3 tracts) just sold at auction in Van Buren county for $4,925/ac up to about $6k/ac. Good looking hunting farm with about 50/50 mix of timber and tillable (albeit very low csr). 5% buyers fee on top of prices. Seems like the prices were down in this particular auction.
 
smithhunter1975 said:
250 acres (3 tracts) just sold at auction in Van Buren county for $4,925/ac up to about $6k/ac. Good looking hunting farm with about 50/50 mix of timber and tillable (albeit very low csr). 5% buyers fee on top of prices. Seems like the prices were down in this particular auction.
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The seller rejected all three offers.......at least that is what I heard.
 
It’s SLOWING!!!!!! Softening. “What would u offer me on this” is far more frequent from sellers. It’s still tight when multiple neighbors want it and have cash. U watch though…. Status quo…. It’s slowing & price reductions are happening.
Theres a pile of dudes I know paying huge cash rent rates as well & a big handful I know that will be losing $ this year after rent & inputs.
Now- if u guys see commodities get even lower…. We in for nice correction. U see the Dow drop a lot (say it goes to 30k or even 35k)…. The rec ground will slow a ton & we would be full blown “buyers market”. 1-2 years ago…. sellers market. NOW: it’s pretty even. IMHO & best guess…. We are heading to Buyers market within next 6-12 months. The high priced sales will still occur but be less frequent. Low to medium quality ground & rec - IMO - big softening on the way.
Like I’ve said before trump wins…. We probably recover & land might even rally. If kackles wins…. I truly believe we are in for a big recession & ground will go way down. I could be wrong & no one knows future but I bet I’m not far off. This Post will be here in 6-12 months to see how far off I am. Most of me doesn’t care….. I actually want land prices to soften for a variety of reasons. But anyone in the long game (like me) still likes to TRY to understand & guess what happens coming up. A lot of it is predictable though too based on all the info we have now…. Interest rates, commodity prices, strength of economy, etc.
If I was truly trying to “time the market” …. I’d pry wait til after election. If Trump wins- I’d load up immediately. If Kackles steals it - I’d wait 6-12 months & try to buy when things collapse.
 
Sligh1 said:
Theres a pile of dudes I know paying huge cash rent rates as well & a big handful I know that will be losing $ this year after rent & inputs.
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That's always a hard pill for the landowner to swallow when market corrections make the current cash rent rate unfeasible.

That can also affect prices since some landowners could decide a given farm isn't worth keeping.
 
Sligh1 said:
It’s SLOWING!!!!!! Softening. “What would u offer me on this” is far more frequent from sellers. It’s still tight when multiple neighbors want it and have cash. U watch though…. Status quo…. It’s slowing & price reductions are happening.
Theres a pile of dudes I know paying huge cash rent rates as well & a big handful I know that will be losing $ this year after rent & inputs.
Now- if u guys see commodities get even lower…. We in for nice correction. U see the Dow drop a lot (say it goes to 30k or even 35k)…. The rec ground will slow a ton & we would be full blown “buyers market”. 1-2 years ago…. sellers market. NOW: it’s pretty even. IMHO & best guess…. We are heading to Buyers market within next 6-12 months. The high priced sales will still occur but be less frequent. Low to medium quality ground & rec - IMO - big softening on the way.
Like I’ve said before trump wins…. We probably recover & land might even rally. If kackles wins…. I truly believe we are in for a big recession & ground will go way down. I could be wrong & no one knows future but I bet I’m not far off. This Post will be here in 6-12 months to see how far off I am. Most of me doesn’t care….. I actually want land prices to soften for a variety of reasons. But anyone in the long game (like me) still likes to TRY to understand & guess what happens coming up. A lot of it is predictable though too based on all the info we have now…. Interest rates, commodity prices, strength of economy, etc.
If I was truly trying to “time the market” …. I’d pry wait til after election. If Trump wins- I’d load up immediately. If Kackles steals it - I’d wait 6-12 months & try to buy when things collapse.
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Regardless of the election, interest rate drops are coming. That will weaken the dollar which improves commodity prices and it makes borrowing more accessible.

I'm still waiting on the returns from Trump's trade war with China that cost American farmers huge exports of soybeans. So, maybe he can finally win that war in a second term.
 
8bitnes said:
Regardless of the election, interest rate drops are coming. That will weaken the dollar which improves commodity prices and it makes borrowing more accessible.

I'm still waiting on the returns from Trump's trade war with China that cost American farmers huge exports of soybeans. So, maybe he can finally win that war in a second term.
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We got paid on that!!! The tariffs on China were paid directly to farmers, by bushel, on soybeans. I made more on soybeans from Trump than Obama. We reduced trade deficits with China & took in massive tariff income & farmers got paid. Soybeans are way lower now than 3 years ago as well. China rips us off in infinite ways. Both sides know it & very few have the guts to do anything about it. Nothing is perfect but farmers as a whole supported the decisions then & IMHO - farmers will unanimously vote Trump & not support Harris.

I agree with u on interest rates. We are heading to recession & that will push rates down. Low to middle class is getting wiped out…. I’m surprised we haven’t had a recession already to be honest. But I bet u are correct on rates.
 
Sligh1 said:
We got paid on that!!! The tariffs on China were paid directly to farmers, by bushel, on soybeans. I made more on soybeans from Trump than Obama. We reduced trade deficits with China & took in massive tariff income & farmers got paid. Soybeans are way lower now than 3 years ago as well. China rips us off in infinite ways. Both sides know it & very few have the guts to do anything about it. Nothing is perfect but farmers as a whole supported the decisions then & IMHO - farmers will unanimously vote Trump & not support Harris.

I agree with u on interest rates. We are heading to recession & that will push rates down. Low to middle class is getting wiped out…. I’m surprised we haven’t had a recession already to be honest. But I bet u are correct on rates.
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That's not how I remember it. I remember getting separate checks from US government to help cover losses from while waiting out the trade war. The taxpayer paid for those losses, not tariffs.
"The spending surge began in mid-2018 when USDA started writing checks to farmers and ranchers to pay for the damage from Trump’s trade war, which brought about higher tariffs that crushed agricultural exports and commodity prices"

Then there is this from the Farm Bureau which helps confirm that those sales have been lost permanently.
"A spokesperson for the American Farm Bureau stated that “farmers have lost the vast majority of what was once a $24 billion market in China” as a result of Chinese retaliatory actions. Meanwhile, the U.S. goods trade deficit with China continued to grow, reaching a record $419.2 billion in 2018."

And then there is this piece speaking on those same losses and discusses why another trade war would be catastrophic
www.newsweek.com

American Agriculture Can't Afford Another Trade War with China

American agriculture stands at a crossroads. With our farmers still reeling from the financial turmoil of the past few years, the prospect of another economic conflict with China is untenable.
www.newsweek.com www.newsweek.com
 
8bitnes said:
That's not how I remember it. I remember getting separate checks from US government to help cover losses from while waiting out the trade war. The taxpayer paid for those losses, not tariffs.
"The spending surge began in mid-2018 when USDA started writing checks to farmers and ranchers to pay for the damage from Trump’s trade war, which brought about higher tariffs that crushed agricultural exports and commodity prices"

Then there is this from the Farm Bureau which helps confirm that those sales have been lost permanently.
"A spokesperson for the American Farm Bureau stated that “farmers have lost the vast majority of what was once a $24 billion market in China” as a result of Chinese retaliatory actions. Meanwhile, the U.S. goods trade deficit with China continued to grow, reaching a record $419.2 billion in 2018."

And then there is this piece speaking on those same losses and discusses why another trade war would be catastrophic
www.newsweek.com

American Agriculture Can't Afford Another Trade War with China

American agriculture stands at a crossroads. With our farmers still reeling from the financial turmoil of the past few years, the prospect of another economic conflict with China is untenable.
www.newsweek.com www.newsweek.com
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good post & data. Read through it all & appreciate the perspective.

2 other quick points….

1) look at the trade deficit with China (this is from Harvard business review) ….. look at the trend & then when trade war started. (& side note- based on that trend & the BS China pulled with currency & stealing from us- we needed a trade war!!). Can see where it peaked and then finally retracted.
2) again, I made more during Trump than Obama. & in the last year we are way down. Regardless who’s at fault…. Farmers understood why we needed to change what was happening with China. If i had to take a wild guess…. I’d bet 80%++ of farmers are Trump voters. I meet countless farmers across many states & it would be an almost impossible task to find a Biden or Harris supporter.

I’m not saying it needs to work this way but, I’d take a hit to what I can make off farm ground if it means our country doesn’t ripped off by China & we quit enriching a communist nation that hates us, steals from us, cheats, pollutes like crazy, etc etc. We need leaders with guts to deal with these really difficult issues. We haven’t had that for 3.5 years & probably 1990’s to 2016 before that.

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Sligh1 said:
good post & data. Read through it all & appreciate the perspective.

2 other quick points….

1) look at the trade deficit with China (this is from Harvard business review) ….. look at the trend & then when trade war started. (& side note- based on that trend & the BS China pulled with currency & stealing from us- we needed a trade war!!). Can see where it peaked and then finally retracted.
2) again, I made more during Trump than Obama. & in the last year we are way down. Regardless who’s at fault…. Farmers understood why we needed to change what was happening with China. If i had to take a wild guess…. I’d bet 80%++ of farmers are Trump voters. I meet countless farmers across many states & it would be an almost impossible task to find a Biden or Harris supporter.

I’m not saying it needs to work this way but, I’d take a hit to what I can make off farm ground if it means our country doesn’t ripped off by China & we quit enriching a communist nation that hates us, steals from us, cheats, pollutes like crazy, etc etc. We need leaders with guts to deal with these really difficult issues. We haven’t had that for 3.5 years & probably 1990’s to 2016 before that.

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I can agree with every point you shared.

It would be nice though to have the Chinese market buying those beans, but those sales have not been recovered six years later while the American crop carryover continues to swell and crops stored on farms reach record levels
 
this was my daily text from one place I sell grain to. $3.67 on corn & $9.16 on beans
If it stays like this (not saying it will or won’t) or slides some more - sure looking like a big repeat of 2015-ish when prices got cut in half - much like this. Tillable around me softened a LOT!!!! Rents softened big time!!!!!! I’ll repeat this one friends…. If u have low to medium quality tillable - NOW is the time to lock your CRP rates in and lock in these higher rental rates before they drop!!!!
The next land report comes out in September…. If I was a betting man, I’d bet it’s 2-3% decrease in land values in 6 months. One after is like march, 2025… if stays like this or worse…. Another 2-5% very easy to see coming off IMO.


IMG_0324.jpeg
 
I hear/see softening, for both rec and tillable ground. I have a neighbor that wants a farm I own in N. Mo. We've been talking about it for a couple years now. He's made offers before, but didn't get to my number. He gathered a bunch of info from me the other day to come back with another try. We'll see what the offer is this time around, maybe he's more serious. The softening market doesn't help me any. He's a farmer so he's probably not feeling flush at this point.....
 
I watch listings almost daily. Yes, I am seeing more inventory and properties sitting for a while now and 'price reduced' after a few weeks. This started a few months ago and is increasing.




For todays market this one looks like a good deal to me for a rec/tillable farm.

Price is in line with most parcels Im seeing for that acerage size, but this one has a good amount of income to go along with it. Looks like it lays well for hunting and the deer should funnel though it well if you look at how the neighborhood lays. Few fingers etc and pretty good access.

If it was closer to me I would be checking this out.

 
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