Iowa land sale
- Thread starter buckdeer1
- Start date
cavey
5 year old buck +
Back in college I bought my first 40 for 500 an acre, 5 grand down and a 150 bucks a month in payments $177 a year in taxes.... a year later I had some of it in crp giving me back 1800 a year...
I had my head into beer and fun at the time and didnt do the math very well . If I only had looked into the future... thought about it more....
I bought that 40 because it had some woods and wanted something to hunt and that was enough.... added 30 more to it eventually and went on to go in debt with a bigger 120 acre purchase.
Instead had I bought a bare ag 40 at a time - I might have even paid less an acre around here (those odd bare 40s were not fetching much.... Paying off that 40 was pretty easy at the time. I had some money in the bank and could have put 5k down on a number of 40's and just let them pay for themselves and bought more. Crp was giving about 100 an acre for land near me in just general ag (non wetland) with 5k down on a 40 and 150 a month in payments 200 a year in taxes = 2 grand a year with the possibility of 4 grand a year in CRP payments.
I literally could have perpetually bought small ag parcels and with the current price jumps been long since retired and still own more than enough to hunt.
Im glad I have what I have but how dumb of me at the time.........
I had my head into beer and fun at the time and didnt do the math very well . If I only had looked into the future... thought about it more....
I bought that 40 because it had some woods and wanted something to hunt and that was enough.... added 30 more to it eventually and went on to go in debt with a bigger 120 acre purchase.
Instead had I bought a bare ag 40 at a time - I might have even paid less an acre around here (those odd bare 40s were not fetching much.... Paying off that 40 was pretty easy at the time. I had some money in the bank and could have put 5k down on a number of 40's and just let them pay for themselves and bought more. Crp was giving about 100 an acre for land near me in just general ag (non wetland) with 5k down on a 40 and 150 a month in payments 200 a year in taxes = 2 grand a year with the possibility of 4 grand a year in CRP payments.
I literally could have perpetually bought small ag parcels and with the current price jumps been long since retired and still own more than enough to hunt.
Im glad I have what I have but how dumb of me at the time.........
Telemark
5 year old buck +
There's always risk in investing. But it's usually better than leaving it in cash, which is guaranteed to go down in value with inflation. Especially after the government just dumped trillions of dollars into the economy.
rocksnstumps
5 year old buck +
Listings will be more numerous when the next "crisis" comes along and puts the cash crunch on folks but if like great recession 2008-2009 prices will no longer go up big every year but not go negative either. Land around here had a bunch of new listings but prices did not dip like the overheated housing market did back then.
Another factor is aging population of land owners. Before covid went to a lot of forest land open tours seeing the results of their management practices. By and large the owners were well into the retirement age crowd. Time is gonna thin those ranks rather quickly now. With valuations much higher, taxes much higher, the family of the now deceased former owner may be motivated to sell. Another driver is relationships gone bad.....i.e. divorce.
Another factor is aging population of land owners. Before covid went to a lot of forest land open tours seeing the results of their management practices. By and large the owners were well into the retirement age crowd. Time is gonna thin those ranks rather quickly now. With valuations much higher, taxes much higher, the family of the now deceased former owner may be motivated to sell. Another driver is relationships gone bad.....i.e. divorce.
hesseu
5 year old buck +
I don't live in a crop area, but I've also got to think that between venture capitalist groups, big businesses, and foreign company investments, this is also driving up the prices exponentially because they can hold long term through a financial crisis if there ever was one. Plus, you own the land that produces the food for the people, you own the people. It's a sad reality at this time unfortunately.
Tree Spud
5 year old buck +
$
$26k/acre = $1.7 mil for 76 acres ... corn at $5/bus, with ~240 bus/acres = $91k for 76 acres ... 19 years to break even on principal ... seems like an odd business investment ... what am I missing?
$26k/acre = $1.7 mil for 76 acres ... corn at $5/bus, with ~240 bus/acres = $91k for 76 acres ... 19 years to break even on principal ... seems like an odd business investment ... what am I missing?
S.T.Fanatic
5 year old buck +
With inputs?
jsasker007
5 year old buck +
Taxes must be fairly substantial.
It depends also on subsidy payments but I have also seen where a farmer can be big enough to have a very high income year and have to spend money or pay taxes.They will buy high to increase basis.Had a farmer buy crap sandy ground for over twice what good land was selling for a couple years ago and that why he did it.I really think that as long as interest rate are so low land prices will be high.So save save save for when it drops again.
hillrunner
5 year old buck +
It doesn't cash flow. Farmers around here pay crazy money for land cause that's the only way to get it. They want to farm, they want their children and grandchildren to farm, and that takes land.
bwoods11
5 year old buck +
Right… and the alternative is .3 percent in the bank or slightly higher rate in a CD. Some will not put $$ in the stock market .
FarmerDan
5 year old buck +
I love this stuff! It's what Legends are made of. An obscure economist taught me this - Most great fortunes were built on high leverage AND so we're most great bankruptcies.
I'll leave you with two illustrations and two cautions (below)....
https://www.extension.iastate.edu/agdm/wholefarm/html/c2-70.html
The average sale price per acre is for farmland -- cropland (irrigated and nonirrigated, average productivity), woodland, & pasture.
I hate averages. If you have an average there's a "higher" and a "lower. A story about that in a moment.
The rents paid, too, are averages.
Here's the story. A doctor, a priest, and a statistician went deer hunting. A big buck jumped up. The doctor shot and missed a foot to the left. The priest fired and missed a foot to the right. The statistician yelled, "WE GOT HIM!"
I'll leave you with two illustrations and two cautions (below)....
https://www.extension.iastate.edu/agdm/wholefarm/html/c2-70.html
The average sale price per acre is for farmland -- cropland (irrigated and nonirrigated, average productivity), woodland, & pasture.
I hate averages. If you have an average there's a "higher" and a "lower. A story about that in a moment.
The rents paid, too, are averages.
Here's the story. A doctor, a priest, and a statistician went deer hunting. A big buck jumped up. The doctor shot and missed a foot to the left. The priest fired and missed a foot to the right. The statistician yelled, "WE GOT HIM!"
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Brian662
5 year old buck +
You can do 200+ bushel of corn in my neighborhood pretty easily. Even my hill country soil pushes 200 bushel corn. Cropland has been going for 7-12k/acre around here depending on size and soil. I just don't see how they can make a profit in Iowa paying double the cost per acre of farm ground with minimal yield increases.
Someone mentioned earlier about 10' of topsoil in Iowa compared to 3' in Kansas. Maybe if you sold off some top soil you could justify the cost but that seems counterproductive to a farmer.
Someone mentioned earlier about 10' of topsoil in Iowa compared to 3' in Kansas. Maybe if you sold off some top soil you could justify the cost but that seems counterproductive to a farmer.
H20fwler
5 year old buck +
We don’t have the crazy deep top soil here like they do in Iowa just the high land prices.
Land here goes for 12K-15K an acre easy with land that the fifth generation farmers wanting even higher so their sons can farm next to them.
Not unusual to get 200 or more bushels per acre here either. I think our county is one of the highest ag counties in the state if not #1.
I don’t see how anyone could make profit on crops here unless they are pretty much paying cash for ground and are third to fifth generation farmers with equipment paid for.
Land here goes for 12K-15K an acre easy with land that the fifth generation farmers wanting even higher so their sons can farm next to them.
Not unusual to get 200 or more bushels per acre here either. I think our county is one of the highest ag counties in the state if not #1.
I don’t see how anyone could make profit on crops here unless they are pretty much paying cash for ground and are third to fifth generation farmers with equipment paid for.
