Lots of Moving Parts!
March is here and we are gearing up for planting season. The past month has had a lot of moving parts. Iowa sold more acres in February of 2022 than we did in 2021 and that was a high year. Since January I have been watching the farmland prices of all companies to get the pulse of what was going to happen in 2022. We have seen a steady to stronger Farmland Market. With the conflict in Ukraine, we have seen the commodity prices increase. I have said it before that “markets are emotion”. When the market is good the emotion and tenor is good. With the conflict we will begin to see some uncertainty that will cause an emotional roller-coaster. We will be watching to see how China reacts as well as watching the euro markets. We have more and more people calling that are heirs to farmland that want to capitalize on the market trends we are seeing. Get ready for more land to break loose and get your purchasing power in order. There is 35.7 million acres in Iowa. It is estimated that 10% of land changes over to a new owner each year. With the Baby Boomer generation starting to transition. There will be one of the largest transitions of wealth unfolding. I wish I had a crystal ball to tell you all what farmland is going to do regarding prices, but I do not. Here are the Facts: We have heirs getting farther removed from the farm. We have a transitioning generation. We have high commodity prices. We have increased risk for all farmers (Money is made in the margins!). We have increasing interest rates (However, they are still historically low). We have a ton of equity in the currently owned farmland. We have investors hedging against inflation and buying farmland. We have investors trading ground and a timeline to utilize their 1031 like kind exchange. We have increasing fuel prices and a government that may make exceptions on ethanol. We have profit in 2021 for most farmers. We have a foreign conflict that is affecting the bread basket of Europe . We have a market that hinges on foreign trade. We have increased inputs that will narrow the margin for 2022.
Results from the 78 Sales (8,605 acres) this last month have the average for the state at $11,193 high quality ground at $13,942/ acre, and medium quality ground averaging $8,331/ acre. Low quality ground has moved up at an average of $6,275/ acre. Our Mission; Is to be your “Trusted Advisors”, Our obligation; is to market your farmland to the largest audience yielding you the most successful outcome!