Home Forums Miscellaneous Topics Rural Living Iowa Farm Land Auction Sale Today.

Around here a $7500 per acre piece of dryland farmland wouldn't pay for itself EVER........not saying some hedge fund or very cash heavy buyer wouldn't bite it off......just saying it will never pencil growing crop on it.
Hell, $3500 an acre won't pencil....and it's pretty good dirt around here. (lot of 100 bu. wheat this summer around)






Wabi, if you pull 2 crops most years off this ground does the banker say it pencils?

I'll bet at these prices, unless you own the ground free and clear, your NET is underwater this year.

They used this theory on housing in the 2000's.......right up to the crash.
The positive about ag is, in a crash or recession ag tends to improve......alot.

No, the land will not pay for it's self, it takes other income.

There's always NEXT year.

What happens around here is the old guys who were wise and bought land back in the 80s for 600 dollars an acre are still making money and are looking for a place to park money....and land is a safe place...when you get 2 of those guys at an auction you may as well go home..we have a few outside investors buying up land too...
So if you have a million dollars setting around. It would buy you 1/4 section here....and you get 35-40k guaranteed income minus taxes..if you rent it...its a very low risk investment...when you want to cash out there is a good chance you will get more than you paid...

You get agriculture people to pay a 35-40k lease on 160 acres?

That must be some pretty productive land.

Or are you talking about city slickers with desk jobs leasing it?

That's what I thought.....
or it's irrigated, maybe.
That is over $200 an acre for rent.

Sure do....some even pay mor than that...
Current rates around here are around 200-225/acre...
My aunt has a 160 se was getting 400 for it....now is down around 300. That's why I'm not renting it from her...my rental ground is at 200..

Just to clarify ....we only pay for the productive acres...so out of a good 160 acres you are luckey to get 140-farmable... If there is a creek or timber....ect it doesn't count...
Also pasture or hay ground is 50 or so...and that might be too much...
So if your a land owner it is a big benefit to put those non productive acres int one of the gov programs....and it sure helps the wildlife...

Non irrigated dry land is what I'm talking...

Bankers don't mind loaning too much on land...you can't run off with it...can't hide it...they know if you don't pay they can sell it...if it doesn't bring what you owe they sell all your other assets....
This is exactly the farm crisis of the 80s....when interest went to 18 percent guys just couldn't pay....banks went down with them...

Rainier,
what crops do you produce on it?

Corn and soybeans...
Have a few cattle running on pasture...

Our soils have a deep clay subsoil layer that holds moister..when it doesn't rain the corn can service without irrigation as long as we have had winter snow and spring rain..

Nice.
Can you pull a corn and a bean crop in the same year?

No just one crop...some do beans after wheat but they don't yeald well ..normal yealds for us is 60-80 bu on normal years...
Jimmy Fredricks lives just south of here and holds the world record title at 163 bu
Our corn on good ground does 180-200 and on poor ground 150. Or less...

Double crop? No

Insane. I never would have imagined it'd bring $8250/acre, not even if it was all premium tillable.

Interesting thread. 20 years ago, I could have bought a section for $600/acre near here. It was fee land, but within the exterior borders of the reservation so there was a discount. I could have made it work but wasn't terribly interested in tying myself to it.

One of my partners recently purchased 40 acres about 20 miles out of town as a potential homesite. With three little kids, I don't know what he was thinking there but its his deal not mine. In any event, the US has paid him to plant a crop, paid him to fence it, paid him to plant trees, and paid him to drill a (dry) well. Not 100% but like 80 and 90% of the costs. He's got checks rolling in from Uncle Sam all the time on a hobby farm. That's where the real money is in land. What can you get them to pay you for?

Finally, land is selling for less here than it did five years ago. Much less. And people find themselves having to divest some of their holdings to maintain their financing as a result. There could be a real correction coming, probably not but its possible. Lots of land about to hit the market, up to the buyers to hold the price up.