$26,000 per acre farmland.

Johnson County, Iowa for the Iowa people. Sold @ auction.

Yep...sounds about right

Prices are crazy. Not sure how you could get it to pay for itself at that price.

Sinsemilla

There must be more to the story. How many acres? Who bought it and why? Who bid against them....and why?

Usually there is the price paid, then there is the rest of the story that explains why. Once you hear that, it either explains it in a way that makes sense, or outs it as something else.

It was a farm that was split up into parcels and sold. One buyer bought all the parcels so the farm was kept intact more or less.

Wife and I bought our first ground in 2001. 320 acres for $373/ac the first 6-7 years we barely made the payments.

76 acres. Parcel 2. The other parcels sold for less money.

Lol

The "cheap ground" of that sale brought 21 an acre to boot

There is no money in farming?

Note- I don't claim to know anything about Iowa farmland. Just happened to run across the article on Agweb.com.

Have to grow pot at those prices.

The buyer will be rich when he sell off 1/4 acre sections of that farmland at $60,000.00 each for new home, building lots.

Keith

That’s was I was thinking, look what farmland is worth and the farmers need more subsidies ?

Oct 1 corn was 5.40 a bushel. If you get 200 bushels an acre thats 1080 dollars gross per acre. How much subsidy are they getting? I have no clue. To pay 26000 per acre it must be huge.

Might not be money in farming the land but for an investor or a really high equity land owner farmer the ownership of the solid asset may far out weight their concern for rate of return on the investment or even ever paying for it.

I know this is on a much smaller scale but I know a semi-retired farmer who now owns a bit over 500 acres. The last he purchased was 5 years ago when he bought a 40 next to him for 440K. His other 465 acres averaged just under 1,000 per acre over time so he now has an average purchase price of just below 1,800 per acre. He has all but one forty in a trust and currently the land rental income from the 416 crop acres is $110,000 per year. He is still getting well over 6% on his original land investments even with the expensive 40.

Bryce

My corn price is $6.09. I have a gut feeling that something other than commodity prices are driving land prices up. Just my 2 cents.

What's driving the price of land, housing, or any material property for that matter is peoples fear of cash losing its value, IMO.

Payback, if growing soybeans, would be about 70 years.

If you put your money in the bank, inflation will steal it from you. If you put your money in the stock market and it crashes, for at least the short term, it's gone. If you buy land with your money, as long as you can pay the property taxes to keep the government from stealing it from you, you have a real investment that will be less volatile.

Keith

Look it up under agriculture subsidies. Then search by state, county, and by farmer's name. It is jaw dropping!!!!!!

There could be a lot of reasons, if it was in northwest Iowa usually it’s for manure rights so they can maintain there beef, dairy, and hog operations, in Johnson county my guess would be some type of development or an investor just needs some place to money.

might be wind turbines on the farm.
Similar one sold in northern Iowa a month ago in the 20,000s with turbines producing income.

We had the thread a week or so back on why the rich are buying farmland. I guess our memory or focus only last a few days. If a person worth 50 billion buys 500 million dollars worth of land at say 20K per acre he buys 25,000 acres of land which is 1% of his total net worth. One percent would be like a person earning a 100 K per year putting 1K in the market or even a junk bond.

We are now having some 3,000 cow dairies buy out the 700-1500 cow dairies near me. It took a while to get enough equity but that is what is taking place now.

Bryce

My bet is it was bought with cash. If everything is paid for, you don't have the desire to live like a millionaire, cash is sitting around, you buy land and don't care that you "paid too much".

I doubt cash was used. Large amounts of cash are assumed to be drug money and confiscated. No evidence, no warrant, just taken. Also the largest bills allowed to be in circulation now are 100 dollar bills. At 26,000 per acre it would take 260 bills per acre.

About 30 years ago I owed my dad 3000. I wanted to pay him back with 1000 dollar bills. I dont know when they were banned but 30 years ago you couldnt get any from a bank. Government hates anonymity.

Cash meaning there was no loan involved. Money in the bank and it is bought.

Thats called writing a check

Around here it is called "It was bought with cash, OR I/they bought it with cash." Whether it is car, house, land, etc.

When you write a check, especially a large check, the IRS is notified. If its a small check the NSA has a record of it as they record ALL electronic communication. When you use cash its a personal and private transaction. We can't have that. Have to make sure all your tax's are paid so government can give your money to someone who is entitled to it.

A while back I was reading an article about these kind of crazy prices for farmland. One guy explained that once you get to a certain size operation (I’m talking many thousands of acres) you can afford to pay crazy prices because in total the per acre cost of production of a bushel of whatever you’re growing isn’t affected that much if you are paying it out over several years, especially when a large part of your base farm is paid for.

It’s similar to what BBLWI was referring to about dairies in his area


Crazy but it makes sense to a degree especially if you HAVE to expand to keep your operation growing

in our area there is also investor money -- the corporate farm seem to have a limitless supply. Mostly cali money looking for ? return (all farmers are rich don't ya know)

That would be true if you think prices and yields are going to remain static.



Same here if one doesn't borrow money we call it paying "cash".

If I had to bet it was either a developer, an ole boy farmer or a rich dude with enough money to avoid financing, or maybe the best choice an investor doing a 1031 exchange legally avoiding taxes on another real estate deal and wanting to get money that is devaluing 5 percent a year out of the bank

Johnson County Iowa is in the Iowa City area of the state.. Alot of new development in that area, plus a "be kind to critters" type of town for many who reside there.

Didn't know you could do that. Our highest performer in my county has gotten paid $7 million in the last 25 years. Avg. of $280,000 per year