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21,900 an acre!

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iowafarmer20

Member
Was reading on the internet today an 80 sold for 21,900 an acre just south of boyden iowa . Just crazy seeing land go for these prices
 
If the government ever gets really serious about cutting their debt and decides to stop farmer payments, the price of land will come back down.
 
What is the rest of the story . There was some land in NW iA went for almost that much but they are dairy farmers and it laid rite beside them pluss his wife had just inherited a bundle theres always a story also someone else was bidding too or it wouldnt have went that high.
 
Thats not uncomman in here in Lancaster county PA, and a lot of the guys in here who cant find land to buy are moving out to Iowa. Sorry to tell you but I think that is going to start being the norm out there. Maybe not 20K an acre on every farm, but def highly increasing land prices...
 
Do you really think you can make interest payments on 22 grand from the government payments for one acre of land?

Land prices are high because farmers are flush with money and CDs aren't paying any interest.
 
Yep that $12 an acre per year government payment will go a long ways toward paying for $20,000 acre land.

I do agree with ending payments at this time with grain being high.

Ending subsides may happen but I doubt it will. By giving payments they get us in to report acres planted so they can keep track of us.
 
I didn't realize how lucky I was! I just calculated my welfare check at about $14/acre! And they just called me yesterday to inform me I had to get in there by Nov. 15 to report winter wheat planting.
 
Its the same old Boom to Bust cycle when the Bust comes there'll be plenty of land at reasonable prices happend to houses in 08, farmland won't be too far behind.Let the bankrupties,crying and wailing begin.
 
Add 4 points to the interst rate and the cash flow changes drastically. Most of the buyers today are only banking on paying the interest,they will never live long enough to pay down the principal. BTW land trades here (Southwestern Ontario) for $8500-$18000/acre
 
Here in eastern Ia. the bank will only loan 50% of the purchase and the buyer must cough up the other half. Someone had 876K laying around. I'm 60 and started working for a wage at 12 and never will gross 876K adding up all gross wages. How is it done?
 
Gary, that is not coffee shop talk if the government got out of the ag subsidy business. Cornell University among others figured that land could potentially take a 30 percent hit in values if that happened. It's been a number of years since that assumption was made so it would be interesting if any university economist has had a recent look at the issue.
I think at some point values will start going the other way and most likely in less than ten years. The speculation has been the big spending has come from older well heeled farmers making a last hurrah. Once these guys get too old for the game the younger farmer with far less cash reserves will be the main purchasers of land. Of course speculators will always be around, too.
 
Very true...I"m hearing that some of this record priced farm land is being paid for in cash..Theres no financing involved..

Meanwhile here in MO 125 bu corn ground can be had for $2500 per acre or less...Until 2011 my farm was carrying a 140 bu proven corn yield...
 
I expect a lot of people aren't putting true "cash" they have laying around into the deal as much as they are putting equity from land they already own into the deal. In this case, if the entire purchase was $1750k, to get that 50% loan to value the purchaser could have come up with $1750k of RE they already owned as extra collateral to essentially 100% finance the new purchase. Works as long as markets don't drop, and you don't mind leveraging what you already own...
 
That was what broke a lot of guys in the 80's, leveraging the equity in what you have to 100% finance what you buy. When it went the other way and they called your loans, game over. There is an old guy here that went bust then told me he went from a net worth of $600,000 to -$800,000 in six months. They may not be making any more land but when other investments that are more liquid start giving better returns it will come down.
 
That is crazy if it was simply out in the boonies. Now farmland near Indianapolis can sell for that if it soon could be developed.

Out in East Central Indiana (Northeast Henry County) a 179 acre farm I can see from my farmhouse porch sold for over $5,000 an acre last month. That out in the bonnies ground will produce 60bpa beans but only around 175bpa corn in a very good year.
 
Here in MA river bottom land in the Conn. River Valley right along the CT River can go for $20k an acre. I have seen some go as high as $22,500 an acre. This is the best soil MA has to offer and people are willing to pay that price. Keep in mind though this isn't corn and bean ground but typically vegetable crops. Drive 30-45 minutes into the hill towns and there is stuff selling for $3000 an acre.
 
I know of areas where I live to sell by the foot for $1000 or more per foot. Of course that is not farm land but lake shore land here at the Lake of the Ozarks
 
i live in az,,,
they were asking for 75k for a bare lot,,,
40k per acre for 5 - 40 acre parcels,,,
and it's nothing but sand,,,
yes they do grow veggies here,,,
just takes a lot of water,,,
 
That part of Iowa has a lot of old family money. They've been good money makers. You can tell it when you drive through and look at all of the neat farm places and good farming practices.

I don't know who bought the land, whether two neighbors locked horns or what, but it was not a prudent purchase. If it was old family money, I'll bet the ancestors who made that money are rolling in their graves, because purchases like that is NOT the way they made it and saved it in the first place. Jim
 
Nancy, Yes, 1 very large very high dollar subdivision! Sell 1/4 acre lots at $20,000 to $40,000 each. about half to clear the note and the rest profit all Ball park #s
Later,
John A.
 
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