Washington Evening Journal, IA

02-02-07

Ag land sale soars beyond $5,000/acre

by Larry Kershner

Although the buyer's name is still not a matter of public record, the land that was purchased is. Lynn Richard, of Richard Realty in Mt. Pleasant, confirmed Thursday that an 80-acre parcel of land was auctioned off south of Winfield on Tuesday for $5,125/acre.

A second 80-acre parcel sold for $3,500/acre. The higher-priced land was purchased by a local producer, Richard said, not an outside investor, who has plans of using it for ag land production.

Apparently, the high price of corn and soybeans has made ag land buyers optimistic over the future, Richard indicated.

Richard told the MP News that that was the highest per acre sale that his firm has experienced to date. The parcel was sold by John and Francis Brown Farms.

Gary Dustman, county assessor, said the sale price is not the highest farm land parcel in this county.

"There have been other sales well higher than that," he said, "but in terms of a sale price for land that was going to be kept in farming, I'd say that's about the highest" price.

Dustman noted that the higher priced of the two parcels has a house and outbuildings on it. Taking out the assessed value of the home and buildings - $58,400 - then the actual per acre cost for the crop land was reduced to $4,395. That parcel was comprised of two tracts of land with corn suitability ratings (CSR) of 66 and 79. CSR is an index applied to all farmland to determine its suitability to grow row crops. The higher the number, the more favorable the land is for productivity.

Conversely, the lesser priced land, which sold at $3,500/acre, had a CSR of 85 and 90.

"It was an odd sale," Dustman said.

In December 2006, Iowa State University released its latest ag land values showing a dramatic jump in ag land values across the state.

The average acre price in Iowa jumped to $3,204 per acre, a jump of $290 from last year. In Henry County, the ISU report showed the average per acre cost for cropland rose to $3,073, up $261, from last year's $2,812, a jump of 9.3 percent.

Both of the parcels that sold on Tuesday in Henry County are well above the average acre price, which could trigger an eventual increase in the overall value of ag land in Henry County, especially if similar parcels continue to sell for $3,500 and higher per acre.