Farmland Market Update October 2021

Hotter than a $2 dollar pistol!    Land is on the move. There is an incredible amount of land that is changing hands.   Generically speaking If you look at the age of the landowner in Iowa over the next 10 years, there will be 1000 acres per county that will change hands.

Many people are wanting to sell with the possibility of changes in the tax law. Congress keeps moving the target but as of right now it looks like they will not get rid of stepped-up basis, or 1031. It is still being negotiated but, right now it looks like they are talking about a 5% rise in the federal capital gains.

It was said to me last week that all farmland that is being purchased is being subsidized by something else. Another job, other paid off farmland, PPP, MFP, inheritance, old money, and people moving other investments into farmland.  I have younger farmers say, “there is no way they can make that cashflow”. They would be correct. To buy farmland in this market you will need to subsidize it with something. That being said, I don’t see us slowing down or the market changing so drastically that farmland will cashflow based off the merit of the crop for a new farmer.

The Realtor Land Institute just published their survey that would align with all our numbers. They showed a 18% rise in farmland in the last 6 months and a 26.6% rise year over year.

Results from the 167 Sales (18,355 acres) this last month have the average for the state at $10,809 high quality ground at $12,446/ acre, and medium quality ground averaging $8,479/ acre. Low quality ground has moved up at an average of $5,978/ 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!

Iowa Statewide Farmland Prices

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Iowa Farmland Prices by CSR

David & Ann Whitaker | Iowa Land Guy

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