Source: Randy Dickhut, AFM, Sr VP/Real Estate Operations, Farmers National Company
Location and quality are key drivers of land prices in Iowa and Wisconsin despite the overall slower land market. "There have been some strong sales for high quality farm land in Iowa and for recreational land in the right location for the buyer" commented Sam Kain, area sales manager for Farmers National Company.
"We are starting to see increasing signs of financial stress among farmers" observed Kain. This is particularly true in the Wisconsin dairy industry as farmers either retire or sell assets including land. In Iowa, the stress on farmers varies by area depending on crop yields the past several years. Farmers National is experiencing an overall growth in acres sold due to the sale of larger tracts and a few distressed sales.
Buying interest for land has remained adequate for the amount on the market for sale, but the buyer profile has changed somewhat. According to Kain, "The farmer buyer is being more cautious and more selective in the farms they will bid on. The 1031 exchange buyers have been active and continue to support current land prices. Investors are also active buyers depending on the type of land they are interested in."
In addition to the recent lower income years, agriculture in Iowa and Wisconsin is also dealing with the current effects of trade issues and weather. "If someone is thinking about selling their farmland or buying land as an investment, they for one need to know the local land market as each area is reacting somewhat differently which could influence price expectations. Buyers and sellers need to be knowledgeable in today's land market or they need to seek assistance" advised Kain.