This is a great auction we have coming up On Aug 27th at public auction. This farm has multiple options with tillable, building sites, current farm site, tillable, and bin site. Check this one out on our auction page or give our office a ring 507.218.1243

Flyer One 4

Here are a couple farms we sold at auction in Olmsted County MN. These farms were great successes and the sellers and buyers felt everything was a win win, its a great day when we can accomplish this!!

SOLD1

SOLD3

Declining Farm income has been hitting land owners by about a 20-30% reduction in Southern Minnesota and Northern IA. If you are at a point where you are thinking declining incomes along with other ownership responsibilities may not be for you anymore we encourage you to look at something called a DST. DST stands for Delaware Statutory Trust, we have had great success using the 1031 exchange proceeds from farm sales to not only free owners from the volatility of the market but increase and stabilized income. Check out the link below from about.com for a good read!

http://homebuying.about.com/od/investmentproperties/a/120108_Delaware.htm

Location and quality driving current land values
By Farmers National Company January 14, 2015 | 7:01 am EST

Comments

Print

As 2014 came to a close, land values had stabilized from the double digit increases of the past few years, according to Farmers National Company, the nation’s leading farm and ranch real estate company. Location and quality of land continue to be main drivers of prices for a given tract of land. The lower supply of land for sale and the continued demand for agricultural land is maintaining general stability of the land market.

“While lower grade land has seen drops in value near 15 percent from recent highs, top quality crop and grazing land still bring solid prices as owner operators and investors seek to expand their operations with the most productive land,” said Randy Dickhut, AFM, Vice President of Real Estate Operations of Farmers National Company.

According to Farmers National Company, the supply of land for sale is less than in the past few years as there is no tax policy change driving sales and landowners remain tight holders of the asset. “Land is viewed as a long term asset and owners consider agricultural land a stable investment in a changing world,” said Dickhut.

Demand for cropland and grazing land from owner operators remains good, but buyers are being more realistic in what they will pay given lower grain prices. Sellers are having to be realistic in evaluating the quality of their land and the expected selling price in order to have a successful sale.

Despite leveling or moderately decreasing land values overall, Farmers National Company has seen strong prices paid for specific properties within the last 60 days based on local competition and the desire for quality. According to Dickhut, farmland seldom comes up for sale in many locations, therefore local producers are willing to pay top dollar to grow their operation and asset base.

Recent value adjustments in the land market still leave land values at historically high levels in the longer term view. Price softening is happening, but at different rates depending on the region, prices for major commodities in that region, and quality of the land. Profitability from record crop incomes supported by insurance coverage, has kept farm operations in the black and producers interested in adding land.

“Buyers are being more realistic when considering land purchases which has reduced the fervor of rapidly escalating prices seen at land auctions in recent years,” said Dickhut. “Owner operators continue to be the main purchasers of agricultural land comprising nearly 90% of buyers in many areas.”

Investors are showing up in the market to purchase land, but are also being realistic in the timing of their purchases and the long term outlook for agricultural land.

Profitability in recent years has left many farm owners cash rich and opting for land purchases for personal and business investments. The tangibility of land and the ability to grow their operation makes land a preferred investment for the owner operator. Producers are being more realistic with their land purchases as they give more attention to the economics of the asset and seek increased financing.

Even with lower grain prices, record grain harvests will keep net farm income quite positive in 2015. This factor should keep the current market fairly stable for the time being.

“As we forecast further out into late 2015 and 2016, circumstances could shift,” said Dickhut. One of the factors that could impact values moving into 2015 is the potential for rising interest rates. If rates increase gradually, as predicted, market impact should be minimal in the short term.

Longer term, world demand for water, food, fuel and fiber will determine commodity prices which will affect future land values. As long as the supply of land for sale remains low and demand continues to be present, land values will be supported, according to Dickhut.

Farmland investment is still a positive long term opportunity for most producers and investors. Despite slight downward shifts, the land market remains stable and supports business expansion for farm operators looking to grow their businesses and investors wanting a long term asset.
REGIONAL LAND VALUE REPORTS

Kansas and Oklahoma

The market for high quality cropland has leveled off throughout the South Central Plains. Buyers are discriminating on marginal to lower quality land due to reduced commodity prices. This is especially true in areas that use irrigation and are experiencing a decline in water levels.

Values remain historically strong overall and high quality land is still bringing top dollar, according to Brock Thurman, AFM, Farmers National Company Vice President and Area Sales Manager, Kiowa, Kan.

“Demand from operators looking for higher quality land for expansion is still high,” said Thurman. “The market remains strong at this point.”

Sales prices for properties with mineral rights and active production remain steady. In addition, positive crop production levels or profitability boosted by crop insurance receipts are also keeping values at high levels. Values remain tied to land quality and location.

Prices for irrigated high quality cropland in the area are variable, but range between $3,300 to $5,000 per acre in western Kansas and $6,000 to $12,000 in northeast Kansas, while the range for non-irrigated land is $2,500 to $4,800.

Iowa and Minnesota

Land values appear to be trending downward in specific areas of Iowa and Minnesota, according to Sam Kain, National Sales Manager for Farmers National Company, West Des Moines, Iowa. Most of the recent changes have occurred in the last 45 to 60 days.

“It is really hard to get a handle on the change in land values as some areas still tend to be very aggressive,” said Kain. “With the outlook for lower commodity prices in 2015, I think we

may have hit the top in the land market for a while,” said Kain. “However, with fewer properties for sale it remains to be seen if a downward trend will be long-term.”

Land is a long-term investment for most buyers, farm owners who want a property that is being sold know they may not get a second chance to buy it within their lifetime. If they want that property they need to aggressively try to purchase it or they may miss the opportunity to ever own it.

In Iowa, top quality land is selling at more than $11,000 per acre, while Minnesota values are reaching $9,000 per acre.

North Dakota, Eastern South Dakota and Western Minnesota

Auction activity for land sales in North Dakota, eastern South Dakota and western Minnesota continue to tighten when compared to 2013, with more transactions going to private listings, according to Terry Longtin, Farmers National Company Vice President and Area Sales Manager, Grand Forks, N.D.

While there are still buyers, sales levels have weakened a bit overall, with levels coming in at 10 to15 percent below the high values of 2012 and 2013. The private listings are working much better as buyers prefer a behind the scenes purchase, versus bidding against their neighbor in a public forum.

“I feel we are at a stabilizing place in the market,” said Longtin. “For people wanting to sell, prices are still excellent, even if they are slightly down from a year ago. Our region’s agricultural economy may be a bit weaker than other regions due to lower commodity prices, a high basis due to railroad transportation issues and average production levels in 2014. Overall though, sellers are still seeing historically high price levels.”

Average to good quality land in the area is selling in the $4,000 to $6,000 per acre range, while excellent land is in the $6,000 to $8,000 per acre range. Top quality land in South Dakota is pulling up to $8,100 per acre, while North Dakota is coming in at $7,200 and Minnesota at $9,000.

Colorado, South Dakota, Nebraska and Wyoming

During 2014, the wide region covering Colorado, western South Dakota, Nebraska and Wyoming saw continued land sales activity. While land values have not increased significantly,

they are still at a steady high level, said JD Maxson, Area Sales Manager for Farmers National Company, North Platte, Neb.

Demand for high quality crop ground coupled with current commodity prices still remain the motivating factors driving land prices. Sellers currently are concerned about long-term commodity prices and buyers are less willing to pay top price. Although land prices have stabilized throughout 2014, most noticeably in the fourth quarter, farmers, owner/operators and investors are still focused on acquiring additional acres.

“The majority of our buyers and sellers have adjusted their expectations in light of lower commodity prices and are more realistic when looking at the bottom line,” said Maxson. “Recent sales and continued buyer demand have reinforced the strength of the land market, which should continue into 2015.”

Recent land auctions since September confirm that buyer demand remains strong for high quality cropland, as prices in this area have reached all-time highs. Auctions scheduled in 2015 will drive the land market values in this region.

“Medium to below average farms are selling at 10, 15 and 20 percent below 2013 prices in specific locations across Nebraska,” said Maxson. “Renewed confidence in the stock market and financial markets may begin to have an impact on land prices. We may see a transition of wealth away from agriculture as investors adjust to favorable increases in returns on alternative investments; however, I don’t foresee a sharp decline in ag land values.”

Prices in this wide region are ranging from $4,500 to $12,000 per acre for high quality tillable acres, with location, soils and topography dictating price.

Illinois, Indiana, Ohio, Southern Michigan, Western Kentucky and Eastern Missouri

Farmland values have trended higher in the past several years throughout the eastern region, and with the recent downturn in crop prices, a calming trend is evident in this area. Quality farmland values remain fairly steady with a slight decline, according to Roger Hayworth, Area Sales Manager for Farmers National Company, Lafayette, Ind.

Prices are directly tied to specific property location and characteristics, including quality and improvements. Demand remains steady, but cautious, and is tied directly to buyer motivation, such as business expansion. The number of transactions is lower than has been seen in the past two years.

“Economic factors that have led to the recent leveling include the current commodity market,” said Hayworth. “In addition, available cash from past farm profitability is allowing local land buyers to enhance their acreage control.” Mid to lower quality farms have seen a weakening in value, which is forecast to continue. Overall, quality farmland values in the region have declined two to five percent.

“The land market is still very manageable for both buyers and sellers,” said Hayworth. “Land remains an inflationary hedge, and the demand for controlled acres remains high. The next 12 months will be very telling for values.”

Top prices in the region can be seen in Illinois at $12,000 per acre on average for high quality land. These levels are followed by Indiana showing values up to $9,950 per acre and Ohio at $7,750 per acre.

Arkansas, Mississippi, Missouri and Texas

Activity in the southern region overall remains steady, but calm. Year-end values for 2014 in Texas indicate an overall slight increase above 2013 of approximately eight percent. The Texas statewide, size adjusted, average price is near $2,350 per acre, up from $2,160 per acre last year. Quality land for sale in all classes is still moving quickly, said Mike Lansford, Farmers National Company, Vice President and Area Sales Manager for the Southern Region, Fort Worth, Texas. Other states in the southern region are posting steady, but generally flat, land values.

Texas has seen an increase in land sale activity along with a slight increase in land values in the past year, said Lansford. The wide variety of geographic regions and land classes in the state has led to some variance of an overall trend. Although improved in 2014, the prolonged drought across much of Texas and the Southwest continues to be the strongest deterrent for the land market. More recently, falling oil prices and the continued possibility of rising interest rates are contributing to projected uncertainty. With commodity prices decreasing, there has been an increased demand for managed timber tracts in East Texas. Well managed pine plantations reflect average prices of approximately $3,500 per acre. Listing demand for timber tracts has seen a drastic increase in the past year. “Land values should remain steady and exhibit less fluctuation as seen in recent years,” said Lansford. “Quality is still king no matter what the land classification. Top quality properties in all classes will continue to capture good prices. Buyers for top producing farms are still available.”

Prices for top farmland are averaging $5,000 per acre in Arkansas, $3,750 per acre in Tennessee, $3,500 per acre in Texas, $5,000 per acre in Mississippi and $7,500 per acre in the Missouri Boot Heel.

Washington

Activity is brisk and very competitive for high quality agricultural land in the Pacific Northwest, driven mostly by minimal supply and high demand, according to Flo Sayre, Real Estate Broker for Farmers National Company in Pasco, Wash.

Investors are clearly one of the strongest demand sources. Rents are very strong in the Columbia Basin, fueled by the number of younger farmers competing for acres. Sellers at this time seem to be asking more than the market can support. Those parcels that are priced correctly have buyers clamoring to get the bid for the property.

“The 30 to 40-year-old generation of young farmers has the skill set, the knowledge and the equipment to farm, but with land prices at the all-time high, they do not have the horsepower to purchase,” said Sayre. “Therefore, they aggressively compete for the same acres. That, in turn, keeps the rents high and gives landowners plenty of cash flow to discourage selling.”

While the prices are high, the local ag lenders are reigning in on the seasonal production loans which, in turn, prompts potential sellers to think about selling.

“We are seeing a few parcels come on the market, though these are not high-end pieces,” said Sayre. “Either they are too small for the investor-buyer or there are enough issues with the property to deter the neighbors from purchasing.”

As the year wraps up and lenders become more demanding of higher returns, expect to see a higher volume of properties turning over. Interest rates cannot remain at this level forever, Sayre said. Buying power will decline as interest rates begin to climb. Sayre expects 2015 to be a “very active year” for real estate sales in the Pacific Northwest.

“If landowners are considering selling, they need to be first in line to attract the best buyers,” Sayre said.

Irrigated farmland in the area is currently averaging $10,000 per acre. One property close to the Urban Growth Boundary recently sold for $14,000 per acre. While the irrigated land prices remain strong, prices in the area have softened with the commodity prices showing $900 per acre for 25-bushel land to $1,400 to $1,500 for 50- to 60-bushel land. Reaching into the Palouse area, prices remain stronger due to the demand for annually cropped acreage, approaching $3,000 per acre.

Article intended for repost education only from Porknetwork.com origainal article http://www.porknetwork.com/news/location-and-quality-driving-current-land-values

High Point Realty and Auction specializes in farm land real estate for sale in Fillmore County, MN. We sell tillable farm land, pasture land sales, and timber lands. We have land for sale in all counties in SE Minnesota. Are you wondering what your farm is worth in Southeast Minnesota? We would be happy to talk to you about your farm.

As another year comes to a close we are again thankful for the opportunities, safety, and good fortune of our family, friends, and clients. We have been blessed and able to expand in our business buying a new location in Stewartville, MN. Construction is underway and we should be up and running around Feb 1st.
This year like many, has offered challenges, hurdles, and successes. We started with a down swing in the corn and bean commodity markets on top of a late spring with cool temps. Coming off the highest prices in history this put an early damper on the land sales market. We saw on average a 7-18% decline in tillable land sales prices overall in Olmsted, Fillmore, Dodge, Freeborn, Steele, Wabasha, Mower, Houston, and Goodhue counties in the first two quarters of 2014. The weather took a turn for the best in most regions giving us plenty of good rain and heat units making the crops look very nice headed into 3rd quarter.
As the beans started changing color and the equipment started to be pulled out of the shed we had a slow up tick of prices in the commodity market. Corn and bean prices seemed to have set a bottom and sales prices/ acre of good land especially took a turn for stability. During 3rd quarter prices had come into the range of about a 5-12% slump from the previous year overall and as crops started to come out producers were happy with the results. Good yields and good early season harvest weather made for good early fall sales with stable prices and some farms back bouncing off the top of the sales charts in southern Minnesota and Northern Iowa. The investor interest really started plowing into farmland sales and rose to about 65% over operator and neighboring property owners.
Fourth quarter came with continued positive weather and yield reports. Land sales remained stable with investor interest climbing to around 75% by the end of the year. Sales overall showed a decline of 5-7% overall in tillable sales. Many of the sales remained very strong and good farms held their values very well. Nearing the end of harvest and with early snow prices began to rally in the commodity markets. Stability was continued by diversified operators in the Beef and Dairy markets, strong investor interest, low interest rates, and previous high income years.
The farm market volatile at times was very stable this year as a whole compared to the commodity market. Farms continue to be good strong long term investments enjoyed by their owners for years and years to come and offer a great renewable resources to our county. We are proud to have been privileged enough work with our clients this year through sometimes unstable waters and thank you all for your trust and friendship along the way. We wish you a safe and enjoyable holiday season and look forward to working with you for years to come.

Sincerely,

High Point Realty & Auction

The National Corn Growers Association just released the winners of the national corn yield contest 2014. A new yield record was set at 503 bushels per acre on corn. Click here to check out the full story.