In case anybody was worried about land prices...

[jjohnsonElknewbie]

Last week a 100 acre farm in NW Iowa sold for $2.6M. 96.33 tillable with 3.67 acre building site. As of 2021, the average price per acre for Plymouth County farm land was $12,416. This was a 31.4% increase over last year.

Statewide, farmland values are up an average of 29% over last year. Prices are likely to increase further this year as the war in Ukraine constricts global grain supplies, driving up farm revenues and the value of land.

 

[11boo]

I don’t know what to think anymore. Just saw good data showing Americans maxing out Credit cards this year and savings plundered. Real estate is still going strong here.

 

[jjohnsonElknewbie]

Can't argue with 30% ROI.

 

[Laramie]

Last week a 100 acre farm in NW Iowa sold for $2.6M. 96.33 tillable with 3.67 acre building site. As of 2021, the average price per acre for Plymouth County farm land was $12,416. This was a 31.4% increase over last year.

Statewide, farmland values are up an average of 29% over last year. Prices are likely to increase further this year as the war in Ukraine constricts global grain supplies, driving up farm revenues and the value of land.

There has to be something a little unique about that 100 acres. Land has increased significantly but strictly from a business standpoint that amount per acre is way out of the sustainable range.

 

[Dos Perros]

Kansas row cropland was up 14+% year over year last I checked, higher than any bordering state. It's crazy. My in-laws could die with millions in dirt but no cash.

 

[mtnbiker208]

my assesment just came in. 67% increase from last year.

 

[Billy Goat]

2 neighbors both really wanted that place.


Generally it's worth more when you are already right next to it.

 

[Customweld]

my assesment just came in. 67% increase from last year.

Same here. Southern Idaho

 

[Gutshot007]

Same here. Southern Idaho

Same here in Minnesota . What's up with that?

 

[FLATHEAD]

Patiently waiting on the next crash.

 

[Customweld]

Same here in Minnesota . What's up with that?

Pure insanity is about all that I can come up with.

 

[Customweld]

Patiently waiting on the next crash.

I've been thinking that since 2017. Every month, I think how in the hell can we sustain this amount of appreciation. Every month it keeps going up. I know everyone has their experience, but here is mine :
We sold my grandfathers house in Emmett, ID in 2017. 1300 SF, on a half acre. Not much for updates since it was built in 1974. Appraised for 87k we were offered 150k cash. We were blew away, thought let's go before the wheels fall off this wagon. A few neighbors have sold their places, in the last year. All of them were pretty much in the same state of upkeep. They all went for 425K+. Crazy times indeed.

 

[WRM]

I've long since given up on any illusion of owning land other than the plot my house sits on. And, damn glad my grandparents built and paid for it! Mucho insanity here in Florida.

 

[jjohnsonElknewbie]

I just don't know how the big farmers, banks, and accountants make the numbers work anymore. As land prices go up input (seed, chemicals, fertilizer, machinery, etc..) costs go up and this year we have unprecedented increases in fuel, Round Up, Liberty, and nitrogen costs. How guys can pay $26k per acre when the income is a fraction of that I have no idea. Here is some quick math, and I'm pretty dumb with math, so please bear with me.

• 100 acres * 200 bushels of corn per acre= 20,000 bushels.
• As of May, corn was trading at $7.39 per bushel (20 year average is around $4). 20,000 * 7.39= $147,800 gross annual revenue.
• Profit on that $147,800 is maybe $40,000?
• $26M mortgage @ 3.92% interest over 30 years has a monthly payment of $122,932

If these guys paid cash for this ground, how in the world are the farm subsidies we all pay for to enable US farmer to compete justified?

 

[Customweld]

I just don't know how the big farmers, banks, and accountants make the numbers work anymore. As land prices go up input (seed, chemicals, fertilizer, machinery, etc..) costs go up and this year we have unprecedented increases in fuel, Round Up, Liberty, and nitrogen costs. How guys can pay $26k per acre when the income is a fraction of that I have no idea. Here is some quick math, and I'm pretty dumb with math, so please bear with me.

• 100 acres * 200 bushels of corn per acre= 20,000 bushels.
• As of May, corn was trading at $7.39 per bushel (20 year average is around $4). 20,000 * 7.39= $147,800 gross annual revenue.
• Profit on that $147,800 is maybe $40,000?
• $26M mortgage @ 3.92% interest over 30 years has a monthly payment of $122,932

If these guys paid cash for this ground, how in the world are the farm subsidies we all pay for to enable US farmer to compete justified?

I don't know how y'all are doing it out there. In Idaho, they are strictly growing roof lines and valley gutters

 

[WRM]

If these guys paid cash for this ground, how in the world are the farm subsidies we all pay for to enable US farmer to compete justified?

They certainly aren't, particularly if the buyers are corporate "farmers". Wait'll you go to the grocery store after that pricing works into the market. You'll long for some $4 a loaf bread.

 

[ID_Matt]

I just don't know how the big farmers, banks, and accountants make the numbers work anymore. As land prices go up input (seed, chemicals, fertilizer, machinery, etc..) costs go up and this year we have unprecedented increases in fuel, Round Up, Liberty, and nitrogen costs. How guys can pay $26k per acre when the income is a fraction of that I have no idea. Here is some quick math, and I'm pretty dumb with math, so please bear with me.

• 100 acres * 200 bushels of corn per acre= 20,000 bushels.
• As of May, corn was trading at $7.39 per bushel (20 year average is around $4). 20,000 * 7.39= $147,800 gross annual revenue.
• Profit on that $147,800 is maybe $40,000?
• $26M mortgage @ 3.92% interest over 30 years has a monthly payment of $122,932

If these guys paid cash for this ground, how in the world are the farm subsidies we all pay for to enable US farmer to compete justified?

100 acres x $26,000 = $2.6M

 

[WeiserBucks]

I don't know how y'all are doing it out there. In Idaho, they are strictly growing roof lines and valley gutters

This is exactly what is going on. All across Idaho developers are buying farm land and planting 5-6 houses per acre. By the time the homes are sold, the corporate developers are making $1.5-2 million per acre and they're completely booked.

 

[FLATHEAD]

Everything going up but my pay.

 

[Btaylor]

I just don't know how the big farmers, banks, and accountants make the numbers work anymore. As land prices go up input (seed, chemicals, fertilizer, machinery, etc..) costs go up and this year we have unprecedented increases in fuel, Round Up, Liberty, and nitrogen costs. How guys can pay $26k per acre when the income is a fraction of that I have no idea. Here is some quick math, and I'm pretty dumb with math, so please bear with me.

• 100 acres * 200 bushels of corn per acre= 20,000 bushels.
• As of May, corn was trading at $7.39 per bushel (20 year average is around $4). 20,000 * 7.39= $147,800 gross annual revenue.
• Profit on that $147,800 is maybe $40,000?
• $26M mortgage @ 3.92% interest over 30 years has a monthly payment of $122,932

If these guys paid cash for this ground, how in the world are the farm subsidies we all pay for to enable US farmer to compete justified?

Prolly growing weed rather than corn. Better margins.