Land prices in the month of April followed the prediction from the previous month’s article. The unexpected twist was $7.00 corn and $15.00 beans. We were headed up in land prices predicted to hit new highs last month, however that was at prices over $1.00 per bushel less. We have surpassed those numbers and are sitting with very high market prices with a market starving for more land.
Here are some items I think are important to consider outside of the “how high will it go conversation”: Land rents and inputs are behind, and the increase in commodities for the most part was post lease agreement and post preordered inputs. If we look at history, this is going to equate to an increase in input prices, rents, and fuel; which has its own problems headed our way much larger than agriculture. Despite this, we have a projected big year for producers if the crop gets in and we have the weather to successfully grow it. If there are low inputs with increased rents this year or next, the ROI of the farm may present an opportunity to be sold higher in the short term due to the current scarcity in land and capability of operators to pay higher rents.
“When to sell”, is the question we are getting asked it seems hourly lately. In my opinion, we have a major shortage in the market currently with buyers paying higher than ever prices in every category. If I were to recommend a property sale, it would be midsummer when the crops are up and trees are leafed out, or plan a sale now for fall/post harvest. I cannot stress enough how important it is to have high quality photos, videos, or trail camera history especially to absentee buyers and investors to buy or push a sale price higher at an auction or multiple offer situation. If we can use the summer to put a great photo package of planting and field work together as well as line up 1031 exchange buyers for property, the planning always pays off and the marketing material is beautiful in the event that we have poor weather down the road.
We are currently scheduling auctions for June and July and September through December. If you are going to sell a property in the future, I highly recommend talking to one of our land agents and having a free proposal completed. In this market, a professional’s fees do not cost money, they make money.
Have a safe planting season and enjoy this wonderful spring we are having!