Iowa has a new farmland price record.
It happened on Wednesday when a 74-acre tract near Hull in Sioux County, in northwest Iowa, sold for $20,000 an acre.
The previous record was set in October when a 120-acre parcel sold for $16,750 per acre near Sioux Center, also in Sioux County.
“Well, nothing surprises me in Sioux County anymore,” said Fred Greder, owner of Benchmark Agribusiness, Mason City.
Auctioneer Pete Polleman, of Hull, who called Wednesday’s sale, said it sold in less than 30 minutes to Leland Kaster, of Hull. He identified the seller as Clinton Shinkle, of Washington state.
“It’s pretty exciting,” said Mark Newman, an auctioneer and attorney at Newman Law Office PC, Forest City.
“My reaction was I can’t believe they’re talking $20,000. I actually wrote it down but wrote down $2,000 instead. I couldn’t make my pen do it.”
Newman said he talked to Polleman, who is a graduate of the World Wide Auction College in Mason City, about the sale Thursday morning.
“I ... said ‘Tell me about that sale,’” Newman said. “He said, ‘What can I say Mark, there were a lot of people there.’”
Polleman went on to tell him that Kaster was a neighbor to the farmland and owned 200 acres and a dairy operation.
“He needed a place to put his manure and needed more silage,” Newman said.
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He said other buyers have used the rationale.
“A lot of the strong buyers have access to manure,” he said. “They need a place to put it, and it saves a lot of money in fertilizer costs.”
Greder said he understands the reasoning, but thought $20,000 might be a bit extreme.
“I’d have to see the numbers penciled out in front of me for that to make sense economically as opposed to renting someone’s nearby farmland,” he said.
The average price for farmland throughout the state has been $6,477 an acre, an increase of more than 30 percent in the last year, according to a survey of real estate agents in September.
In North Iowa, Greder said farmland prices have ranged from $4,000 an acre for low quality land to $12,000 an acre for high quality land.
A farm in Hancock County recently sold for $11,900, setting a county record, Newman said.
“I would say real soon we’ll see that record broken again if that $20,000 sale is any indication that the desire for farmland has not slowed down any, even with the recent drop in corn prices,” he said.
Whether or not local prices climb to $20,000 no one knows for sure.
“There’s no question we’re in a bubble,” Greder said. “I just don’t know when it’s going to burst. That could be several years and several thousands of dollars away.”
— The Sioux City Journal and Associated Press contributed to this report.