Auction company 

Tenders drive up land prices


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Interest in buying farmland has grown since a downturn induced by a coronavirus pandemic blanketed the land market last spring. Farmers feel more financially secure, as very high commodity prices have arrived on top of large government payments in 2020. This is causing farmers to bid more aggressively for additional land than has been the case in the past. over the past six years.

“Selling prices for farmland have risen 5 to 15% in the past six months, with most of the increase occurring since the first of the year,” said Randy Dickhut, senior vice president of real estate operations at Farmers National Company. “Tenders between interested buyers are really driving up land prices right now. “

Individual investors, whether first-time buyers or experienced, are entering the land market in search of a safe and long-term real estate investment in a low interest rate environment. Buying investors rarely outbid farmer-buyers for a good farm unless they have 1,031 tax-deferred swap funds to spend in a short period of time.

The increase in the price of agricultural land occurs in most parts of the grain belt and with most types of land.

“At the Farmers National Company auction, we see competitive bidding pushing the prices of good cropland to levels close to 2014 values,” Dickhut said. “Mid-to-lower quality farms also experience higher selling prices, while pasture increases are more modest. “

Currently, the demand for good agricultural land exceeds the supply of farms for sale. In recent years, the number of farms for sale has been lower, but market demand for agricultural land has remained sufficient to balance the decline in supply, resulting in stable land prices. One of the main factors driving prices up is the strong demand to own farmland right now.

“In order for the seller to get the best price in today’s land market, they need to make sure there is a real competitive supply,” Dickhut said. “Farmers National Company and its agents use the most comprehensive platform of competitive auction systems available to obtain the best price for sellers, including public auction, a full range of online auctions and live simultaneous, various written auction mechanisms and other auction or SEO platforms.

Higher land values ​​will attract more sellers to the market as estates, trusts, recent heirs, and family groups decide to sell the farm or ranch and take advantage of the higher prices. In addition, the uncertainty surrounding future tax policies will trigger a sale sooner rather than later for some.

Landowners who are considering selling their farm are now considering both the higher proceeds they would make from the sale and the potential tax obligations that might be owed.

The land market will balance the increased demand for good cropland against what could be an increasing supply of farms for sale.

“Our agents are responding to an increased number of calls from landowners who wish to sell for the above reasons. Our sales activity pipeline for the summer and fall is filling up. Dickhut said.

Farmers National Company’s land sales activity has already been very strong and above the market for the past seven months, with dollar volume of land sold up 60% from last year and 67% compared to the average for the last three years. The number of acres sold during this period is up 64% from last year.

In a rising land market, it becomes more difficult to predict what price a farm will actually sell for on any given day, especially when there is demand from both farmers and investors, Dickhut said.

“The best way to sell cropland in today’s market is by auctioning it off or in some form of competitive bidding that brings together potential buyers and allows them to drive up prices,” he said. declared.

Iowa, Illinois and Missouri

Buyers are actively pushing land prices in Iowa, Illinois and Missouri, with selling prices in some areas reaching near the 2014 peak in value.

“Prices for cropland in Iowa statewide have increased 13% since January, while prices in Illinois have increased 10%,” observed David Whitaker, regional sales manager. for Farmers National Company.

Missouri’s increases are smaller but still significant.

“We are seeing sales of $ 13,000, $ 14,000 and $ 15,000 an acre for good cropland in our recent auctions. Mid-grade farms are also selling well now, which is a change from the past few years, ”according to Whitaker.

Today’s farmland market has more buyers than sellers. The inventory of farms for sale is currently at a low point for all real estate brokers as buyers aggressively buy what has been put up for sale.

“The prospect of a seven dollar corn is stimulating demand for good cropland in the Corn Belt. It makes farmers even more optimistic about buying farmland, ”Whitaker said.

Competitive auctions among potential buyers offer sellers the best selling prices, Whitaker said.

“If you want the best price in my area, a seller has to auction their land to attract all potential buyers,” he suggested.

More farms are expected to come up for sale as the year progresses due to higher prices received and potential changes in tax policy.

“We have already seen increased interest from some landowners as we receive daily calls regarding their intention to sell in the coming months,” said Whitaker. “Our agents are busy booking auctions and sales for later in the summer and through to the end of the year.”

North Dakota, South Dakota and Minnesota

Buyers are actively pushing land prices in the northern plains as selling prices in some areas approach past highs.

“We’re seeing land prices up 10-15% for good cropland in the area,” said Brian Mohr, area sales manager for Farmers National Company.

Prices for ranches and pastures are relatively stable and do not experience the same increases as good cropland in the region. Investing buyers are more interested in ranches in the West River area. Drought concerns have dampened buyers’ interest in the most sensitive areas.

Today’s farmland market has more buyers than sellers. The inventory of farms for sale is currently at a low point for all real estate brokers as buyers aggressively buy what has been put up for sale.

“The prospect of higher commodity prices is stimulating demand for good cropland in the region. It makes farmers even more optimistic about buying farmland, ”Mohr said.

Competitive auctions among potential buyers offer the best selling prices to sellers in most regions.

“If you want the best price in my area, some type of open auction like a public auction,

online auctions or written offers make all potential buyers stand out, ”Mohr said. “In addition, buyers are bidding more aggressively on traditional private treaty lists. “

More farms and ranches are expected to come up for sale as the year progresses due to higher prices received and potential changes in tax policy.

“We have already seen increased interest from some landowners as we receive daily calls about their intention to sell in the coming months,” he said. “Our agents are busy booking auctions and sales for later in the summer and through to the end of the year.”

Nebraska, Kansas, Oklahoma, Texas and Arkansas

Buyers are actively pushing land prices in the central and southern plains as selling prices in some areas approach past highs.

“We are seeing land prices rise by 10-12% for good cropland in the area,” observed Paul Schadegg, area sales manager for Farmers National Company.

Prices for arid farms in the western plains are also strengthening, after a long period of weak demand.

“There is now more demand for medium to lower quality land than there has been for several years,” he said.

Today’s farmland market has more buyers than sellers. The inventory of farms for sale is currently at a low point for all real estate brokers as buyers aggressively buy what has been put up for sale.

“The prospect of higher commodity prices is stimulating demand for good cropland in the region. This makes farmers even more optimistic about buying farmland, ”Schadegg said.

Competitive auctions among potential buyers offer sellers the best selling prices in most areas.

“If you want the best price in my area, auction it off and let people bid,” Schadegg said. “In addition, buyers are bidding more aggressively on traditional private treaty lists. “

More farms and ranches are expected to come up for sale as the year progresses due to higher prices received and potential changes in tax policy.

“We have already seen increased interest from some landowners as we receive daily calls about their intention to sell in the coming months,” he said. “Our agents are busy booking auctions and sales for later in the summer and through to the end of the year.”

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