By Jim Rothermich, Iowa Appraisal

When looking at the auction results on the following pages, what sticks out to me the most is the number of “No Sales” at auction, which has increased significantly. There are nine “No Sales” this month. Looking back on February 2023, there were two.

This was trending upward last month with five “No Sales.” I have been very optimistic about land market conditions, thinking we may have a single digit decrease, but I must acknowledge the facts.

The land market is adjusting, and in some areas, a double-digit decrease has occurred. I think this trend will continue as there are several factors pulling the market down. Sioux County keeps cranking out near-record prices, yielding a recent sale at $29,600/acre. Sioux County also produced the highest price on November 11, 2022, at $30,000/acre. Strong prices will show up in an adjusting market, but the overall trend currently shows market conditions are decreasing.

Here are some comments from my realtor/auctioneer friends this past month:

· Country elevators have upper $3 per bushel corn prices. Corn prices that begin with $3 do not work for anyone.

· Large supplies of grain are still sitting in grain bins on the farm, unpriced, which has caused potential buyers to “pause” in making large capital expenditures.

· All classes of land are feeling market conditions decrease.

· Some auctions struggle to get bids.

· Some sellers think market conditions are still at peak, which is causing “No Sales.” Sellers need to be educated about the current market.

· Per the Iowa State 2024 Crop Budget, for corn following corn with 204 bushel per acre yield, breakeven is $5.11/bushel with $331/acre cash rent. For corn following soybeans, breakeven per bushel is $4.47. Input prices are so high that corn is not profitable and has either eliminated buyers or made them less aggressive. Corn is king in Iowa.

· The Federal Reserve is supposed to lower interest rates this year, but they haven’t because it will cause inflation increases. Current interest rates are prohibitive for buying land.

To read the entire report click here.