By DOUG SCHMITZ
LOGAN, Iowa — An 80-acre swath of prime farmland in northwest Iowa that sold for a whopping $21,900 an acre last month not only broke a previous sales record, but has also become one of the nation’s hottest spots of rural real estate, according to experts.
“It attracted a great deal of attention,” said Jason Smith, farmland auctioneer at Ed Spencer Real Estate and Auction Co. in Logan. “The national media swooped in from NBC, CBS, ABC, the Associated Press and countless reporters from around the nation.
“Twitter was abuzz with news of the sale. Everybody pitched their two cents’ worth in. Rumors floated – and are still floating – that the sale never closed when, in fact, it did close.”
Located in Sheridan Township, just south of Boyden in Sioux County, the estimated 80.47-acre cropland is right in an area “where there is fierce competition for farmland real estate,” Smith said, which added to the increased demand for Iowa farmland.
Despite the severe drought this summer, he said 79 of the 80.47 acres sold were tillable and “close to grain markets.
“While it may not be anything special in terms of other farms available across the state, it was to at least two people, and that’s the magic of auction marketing,” he said. “It’s open, transparent and lets everyone compete for the same asset under the same terms and conditions. It’s the most honest and fair way to sell anything.”
Sold by Boyden farmer Henry Boelsma, the Oct. 25 sale, held in the Boyden Community Center, surpassed last year’s record purchase of a 74-acre parcel of farmland near Hull, Iowa, sold at an auction for $20,000 per acre – also located in Sioux County.
“We had about 75 people at the auction and a number of telephone bidders from investors,” Todd Hatterman, an auctioneer at Vander Werff and Associates in Sanborn, Iowa, told the Des Moines Register about the Hull sale.
The buyers of the Boyden land are neighboring farmers.
According to a September survey released by the Iowa Farm & Land Chapter #2 Realtors Land Institute in Mount Vernon, prices for Iowa farmland have skyrocketed over the past several years, with the land value of tillable acres reaching an average of 7.7 percent over the last six months alone.
The biennial survey also indicated Iowa cropland values for potential corn production rose nearly 22 percent over the 12 months to an average of $7,878 per acre ending in September.
Last year, Iowa farmland value was estimated to hit a record $6,708 per acre average statewide, an increase of 32.5 percent, or $1,644 per acre, from 2010, according to Iowa State University’s 2011 Iowa Land Value Survey. Conducted annually by Mike Duffy, extension agricultural economist, the 2012 Survey will be released next month.
Duffy told Thomson-Reuters given that crop prices hit historical highs this summer, “these somewhat larger yields gave some Iowa farmers an economic boost and added to the record income levels they enjoyed in 2011.
“If you look at what the prognosticators are saying that I look at, the predictions for corn prices range from $4 to $9,” which would depend on the weather, he said. “If we get moisture this winter and spring, the prices will fall back for land. If we don’t, they’ll stay up.”
Earlier last month, Thomson-Reuters reported another piece of farmland in Sioux County sold for $19,100, “home to dairies, swine farms and livestock feed lots that need land to disperse the manure.” Moreover, a tract of farmland in Carroll County sold for $16,000 per acre.