Monday, June 30, 2014

Land Prices Still Outrageous in Northwest Iowa

A farm sale in northwest Iowa is again making headlines as 80 acres of truly prime cropland passed under the gavel for $20,400 an acre June 9. At a time when farmland sales are soft and prospects for gains in farmland values seem slim due to lower commodity prices, the ability for a block of land to top $20,000 an acre is certainly headline making.
The tract of land involved consisted of 80 acres two miles east of Boyden in Sioux County. It offered 78.3 tillable acres and excellent soils. It carried a Corn Suitability Rating (CSR) of 76.2 (maximum 100), which is quite extraordinary in northwest Iowa. The county CSR average is 64.8, so the soils are some 18% better than average. Iowa is switching to a new CSR rating system called CSR2, which updates the CSR rating system developed in the early 1970s. That system, too, maxes out at 100. This farm's soils offered a CSR2 of 99.5!
The Boyden area of Sioux County has been a hotbed of high farmland prices due to deeply entrenched, multi-generational, well-financed livestock and grain farm family operations in that area.
$20,400 an acre to grow under $4 corn?  That better be some amazing soil.

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