County — Feb 8, 2012 6:00 pm

County farm land sales prices reach all-time high

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HARTINGTON — Prices for farm land recently reached an all-time high in Cedar County and across the state.
Several Cedar County farmland sales in Precincts 16 and 17 have come in with selling prices of over $7,000 per acre – and a few of the recent sales are even higher.
Farm ground near Coleridge, which included irrigated and dry crop land, recently sold for over $8,000 an acre.

A quarter section of land, less one acre, located northeast of Randolph sold for just under $7,000
Land west of Hartington in Precinct 10 sold for over $1 million. The selling price, which was over $1.1 million, included a little over $90,000 for non-real property, which could have been for the pivot on the land.
Laurel attorney and real estate salesman Craig Monson looks for the sales prices on farm ground to continue to increase during 2012.
Monson believes he could be selling land for $10,000 an acre and over during this year.
“I have a list of names as long as your arm, of people who want to buy farm ground,” Monson said. “The price will be going up – it won’t be month-by -month – it will be week-by-week. Tax laws will play a major part in this.”
According to Monson, the capital gains tax rate is currently good for sellers.
If land owners wait until 2013 to sell, they could be disappointed as the Bush tax cuts might not be extended,  Monson said.
“There has never been a better time to sell farm ground.” he said. “Everything is in line: favorable tax laws, historically low interest rates, high commodity prices, along with an over-seas demand for corn and beans. We have had good crops and good rains for the last several years.”
Chris Miller, a real estate broker with Don Miller Land Co, Hartington, recently sold farm ground, which was dry crop, south of Laurel for close to $8,500 per acre.
“We just closed on it – it is the highest price I have seen in Cedar County so far,” Miller said.
Two or three farm ground sales that happened late last fall show there has been an increase in the selling price since last summer, according to Miller.
Most farm sales involve dry crop or a combination of dry and irrigated crop land.
Miller hasn’t seen as much pasture land sell, though.
“I suspect if land with pasture comes on the market it would also be higher,”  Miller said.

As a general rule, farm ground in the southern portion of Cedar County sells higher than in the northern part of the county.
“It has always been the trend – it is because of the soil types and the topography,” Miller said.
The U.S. farmland market continues to be hot, with values reaching a two-year high, according to Lee Vermeer vice president of real estate operations at Farmers National Company.

“In the past year I have seen a range of numbers that are astronomical,” Vermeer said. “Values are up 20-30 percent in Nebraska, and Iowa is similar. The supply is limited and the requests are high.”
Vermeer also thinks the trend for high-priced farmland will continue through 2012.
“I look for prices to stay strong, but I don’t think the prices will continue to increase at the same rate they did during the last year,” Vermeer said.
Strong grain prices are boosting profits for farmers, prompting them to pursue land in order to expand operations. In addition, cash rents in top production areas have increased 25 to 40 percent during 2011, Vermeer said.
“Farmland values reflect what the land will return,” Vermeer said. “We have $5-$6 corn and $12 beans and we have had some real good yields for increased farm profits. Farmers have become real aggressive on growing more.”

Even though farmers make up over 75 percent of the buyers in the market, Vermeer has seen an increase in interest from investors.
“More investors are coming into the market,” Vermeer said. “Farmland is showing a competitive return. They are looking at the return from an acre of ground versus what they would be getting from a CD.  It is Economics 101 – supply and demand. We have more buyers then sellers.”

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