Posted on Aug 23, 2022
Farmland prices soar, making it even harder for young farmers to break in and grow
463
7
2
4
4
0
At a recent farmland auction in Jesup, Iowa, a couple dozen farmers and landowners drank coffee, ate cookies and chatted before filing into rows of chairs for the sale.
Many didn’t come to bid, but rather to see what the market was doing.
Within minutes the fertile farm east of Waterloo had been sold. One section went to a local farmer for $19,600 an acre; the other two sections went to an investor for $17,700 an acre.
In comparison, two years ago high quality farmland in Iowa sold for an average of $9,500 per acre, according to data from Farmers National Company.
“I was astounded,” said Jesup farmer Ben Riensche, of the outcome. “This went probably 20% farther than I thought it would, past my expectations.”
Farmland values have been rocketing up across the Midwest, for the last year and a half. Farms in Iowa have sold for as much as $25,500 an acre with values increasing 26% in the state over last year and 18% in Illinois, according to data from the Federal Reserve Bank of Chicago. On average, prices rose 25% in Nebraska, and 23% in Kansas over the last year, according to data from the Federal Reserve Bank of Kansas City.
Many didn’t come to bid, but rather to see what the market was doing.
Within minutes the fertile farm east of Waterloo had been sold. One section went to a local farmer for $19,600 an acre; the other two sections went to an investor for $17,700 an acre.
In comparison, two years ago high quality farmland in Iowa sold for an average of $9,500 per acre, according to data from Farmers National Company.
“I was astounded,” said Jesup farmer Ben Riensche, of the outcome. “This went probably 20% farther than I thought it would, past my expectations.”
Farmland values have been rocketing up across the Midwest, for the last year and a half. Farms in Iowa have sold for as much as $25,500 an acre with values increasing 26% in the state over last year and 18% in Illinois, according to data from the Federal Reserve Bank of Chicago. On average, prices rose 25% in Nebraska, and 23% in Kansas over the last year, according to data from the Federal Reserve Bank of Kansas City.
Farmland prices soar, making it even harder for young farmers to break in and grow
Posted from news.stlpublicradio.org
Farming
Agriculture
Waterloo
Posted 2 y ago
Responses: 2
2
2
0
PO1 William "Chip" Nagel
..."It’s unclear whether farmland prices will continue to rise or stabilize. The Federal Reserve recently raised interest rates by three-quarters of a percentage point. David Oppedahl, a senior business economist with the Federal Reserve Bank of Chicago, said the general pattern is that when interest rates go up, it puts some drag on farmland values.
“As interest rates rise, that’s going to have some downward pressure on the farmland markets,” Oppedahl said. “But at this point, it’s uncertain how quickly and how much other factors might be still stronger than that.”
The uncertainty around where prices will go can leave farmers who’ve bought land recently wondering what it will ultimately be worth.
Jesup farmer Ben Riensche didn’t bid at the July auction, but he bought 40 acres at another auction for $15,000 an acre. He said it was a “strategic” move because the tract of land he bought fit onto a larger field he has.
“It was way more than I ever hoped to pay,” Riensche said. “But we’ll find out in a decade whether I was too high or too soon.”
..."It’s unclear whether farmland prices will continue to rise or stabilize. The Federal Reserve recently raised interest rates by three-quarters of a percentage point. David Oppedahl, a senior business economist with the Federal Reserve Bank of Chicago, said the general pattern is that when interest rates go up, it puts some drag on farmland values.
“As interest rates rise, that’s going to have some downward pressure on the farmland markets,” Oppedahl said. “But at this point, it’s uncertain how quickly and how much other factors might be still stronger than that.”
The uncertainty around where prices will go can leave farmers who’ve bought land recently wondering what it will ultimately be worth.
Jesup farmer Ben Riensche didn’t bid at the July auction, but he bought 40 acres at another auction for $15,000 an acre. He said it was a “strategic” move because the tract of land he bought fit onto a larger field he has.
“It was way more than I ever hoped to pay,” Riensche said. “But we’ll find out in a decade whether I was too high or too soon.”
(2)
(0)
1
1
0
We are actually considering selling off our big animals, pigs and cattle because of feed prices and time. We love our farm, but farming requires that someone is at the house every day, especially since animals have to be fed and watered every day. We won't sell the farm though, we love our 39 acres. The $$ we will save not buying feed and covering the cost of caring for the animals, will be saved and used to support local farmers. We will still buy hogs and steers ready for processing and not have the overhead cost of raising them to butcher size.
(1)
(0)
Read This Next
Continue with Facebook 
Continue with Google