land auction results

Just back from the land auction I went to this morning. If you cut and paste this web address it will take you to a sale bill.

http://www.biddersandbuyers.com/ads/010909johnson.htm

This is in Salem township, Knox county IL. After the survey there was a total of 658 contiguous acres of farm ground. No buildings. According to the FSA office there was a total of 24 non tillable acres and tract 4 had 10 of them. It was all highly productive prarie soils that had been well taken care of by the tenant who had been there for 20 years. No brushy fence rows, weeds had been mowed, waterways were maintained and every thing looked like you would want it to. Some of this farm had been in the farmily since 1842.

Tract 1 was 124.4 acres and sold for 7200/ac.
Tract 2 was 122.3 acres and sold for 7450/ac.
Tract 3 was 103.4 acres and sold for 6700/ac.
Tract 4 was 125.7 acres and sold for 7650/ac.
Tract 5 was 138.9 acres and sold for 6300/ac.
Tract 6 was 43.6 acres and sold for 5600/ac.
All tracts were sold individually.
Tracts 1,2,3,4 were bought by a large close farm operation. Tract 5 went to the farmer who was the tenant. Tract 6 went to another farmer from just down the road.
I have heard land prices are down 15-20% but it looks like prime farm ground is holding up pretty well. No one was really suprised by any of the prices. Alot of people didnt think it would go this high but good productive farm ground is always expensive.
I had a doughnut, a can of pepsi, talked to some friends and made sure I didnt wave at anybody. Of course when everybody wanted to know who had bought the first 4 tracts I just told'em "I did"! We had a good laugh.
bill

Should've jumped right in there Bill - More opportunity for your great pictures! Prices like that are going to take a looooong time to pay for itself.
Jim

I was told this past July 2008 that a farm near New Berlin, IL sold for $8500/acre. I think it totaled around 600+ acres. Thats alot of money $5,100,000 !!!!!

In October I watched Nemaha County land in NE Kansas sell. A quarter section of mixed pasture and tilled land with a pretty rough house (livable after some work) and buildings sell for just under $3800 an acre. The land was terraced but with a lot of bushy waterways and treelines. The fencing was also in poor condition. Seemed like the "financial melt down" hadn't hurt their prices to much either.

Thanks Bill.

I always like to hear what land prices are in other parts of the country. It's hard to tell when realtors putting astronomical asking prices on everything.

I'm kind of surprised that the land brought so much. It doesn't seem possible to get by selling 160 acres of beans/corn if you have to pay about $80,000/year in mortgage payments on 160 acres.

My dad used to joke that when he was younger, he always "wanted to farm in the worst way". After 10 years of subsistance dairy farming, he opined that maybe he had found it. Guess paying 7 grand an acre might also fit the definition, IMHO.

I'll begin by saying WOW! Read some of the other comments and saw no mention of what that is going to do to the tax assessment on that and surrounding land. The extra taxes to bear now that profit margins tightened back up leaves very little room for error in a bad year. At some point this may make farmers unattractive to bankers (those who have to borrow money).
I worry how hard these values will fall when you pull away some the underpinning like section 1031 exchanges. Likely to happen because the development market has dramatically fallen off. I would not be surprised to see 1031 go away because the feds will be scrambling for revenue. Also, only older well heeled farmer from my experience are the only ones that can pay that. Not gonna fly with younger farmers who have to finance and have to show that parcel cashflowing on its own merit instead of relative to total farm cashflow which puts the whole operation at risk.
Like everything prior to last year, big short term bonanza followed by much longer bust period.

Bill,

Could you tell me where Salem Township is? Back in 1957 I worked on a farm 3 miles east of Altona, but I never knew what township I was in. More interested in girls in those days, I guess. I was not from that area, so I didn't pay much attention to the local geography.

Thanks,

Stan

Thanks Bill. It looks like there are some good bidders out there yet on this farmland. I agree with you that good land always brings a good price. I hope it works out well for the new owners.

How do people do it???????? Wife sent me a link to a horse farm in FL for just under 20 million. Guess you'd have to hit the lottery for twice that just to pay for it and keep the tax man off your back..........

My guess is that they are counting on high inflation coming. It's the only way such a purchase could make any sense at all.

Before the real estate bubble really took off my dad tried to buy the farm next to mine for $3000/acre which was really high at the time. He was outbid by a guy from the city. This guy sat on it for about 5 years and is now advertising it for $7500/acre. It's not even half tillable and what is tillable is mostly gumbo. The whole thing would be pretty funny if it wasn't so sad.

Bill, did you see where Aumann is selling about 3900 acres south of Springfield, in several differant tracts. Be interesting to see what that sells for.
Jim

grrrrrrrrr I told my wife we should have bought that 80 next to ours for $4000/per

here in ky it is different last 3 auctions were no sales from 700 to 1700 per acre down around 500 from 6 months ago probably going to get worse here the sales depended on town people selling houses and moving and the crap program is destroying our environment and natural beauty that is hurting also

Larry,

What part of KY are you in?

86 acres across the road from my house just sold for $241,000 with no minerals.

Dave

Stan Just east of Gallesburg as I recal. Bernie Steffen

I wasn't making any money on the farm so I bought more land.

What would be the average corn yield on that ground?Mark

Salem township is in the far south east corner of knox county where it joins Fulton and Peoria counties. The farms were located just outside Yates City. I would guess these farms in the last five years have averaged over 200bpa.
bill

about 6 weeks ago 158 acres (near winslow il) sold for something like 1.1 million dollars i think it brought 63 to 6400 per acre range. this was about 6 miles southwest of me.

We are buying about anything we want here in Central Mo for $2400 an acre. Last 120 acre farm was 90 acres row crop. Good producing land.


Gene

Bernie,

Thanks for the info.

Stan