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Saturday, June 25, 2016

Local agland market still strong, but livestock losses are a worry

Monday, July 27, 2009

The area farmland market continues fairly strong and stable, despite signs of potential volatability, experts at Stalcup Ag Service in Storm Lake report this week.

The market is running "stable to slightly higher," says Stalcup's Kent Smith.

The major impact of the economic turmoil of the past nine months has been to limit the amount of agland put on the market. Auctions have been few and far between, with land sales more likely to be handled privately for set asking prices, but both farmers and investors have been buying acreas at about the same rate as in recent past years.

Better grain prices, moderating fertilizer costs and a general feeling that the economy may be nearing some recovery may be helping to support the local marker, Smith says.

A June sale brought a strong $6,500 an acre for an Ida County 84-acre area in June, and a recent Sac County sale (including two wind towers) produced $6,150. A Buena Vista County sale of 81 acres returned $4,325 in April, still well above the rates seen a couple of years earlier.

Stalcup currently lists a couple of farms at up to $5,500 an acre, and completes a private sale for 10 percent over expected price.

Most of the sales in the region are going to active farmers. Suburban development was hot a few years ago involving land swaps, but have settled down now, with about a quarter to a third of the farm acres being sold going to investors.

With local crops looking good and ethanol production improving in the face of higher oil prices, Stalcup is predicting some improvement in the land market through the rest of the years. Struggling cattle, hog and dairy markets are a concern however, and could effect land values if livestock losses continue.

"Reduction in the livestock herd would reduce corn and soybean consumption by our best grain customer, the livestock producer," Smith points out.