Southwest Crop Conditions

USDA's "final" crop production report on January 12th began to show more recognition of drought impact on western Corn Belt yields, particularly in Nebraska. While this crop report is "final" for estimating 2022 crop production, quarterly reports at the end of March, June, and even September have the potential to modify stocks and usage, which is another way to "modify" 2022 crop production.

The report was friendly to prices. Corn had lagged a bit after a nice rally at the end of December. Post-report, corn has nearly retraced to its late December high. Soybean prices have broken out to the post-harvest high and appears poised to move higher. However, this is the third year of high prices. Long-term storage often shows little or no return as the "short-crop, long fail" influence on prices takes effect. The two largest unknowns are drought recovery and South American crop size. It does appear that the climate is shifting patterns this year. Last year almost perfectly mimicked the previous year for weather patterns, so a shift is seen as positive.

Land values continue to be strong; however, our database of sales indicates the overall land market was basically flat in the 4th quarter. There were certainly a number of sales that were above the anticipated price range. The overall average of "good" farmland was about $15,250 per acre based on about 11,700 acres in the 4th quarter.

Recently, a group of athletes purchased 104 acres of cropland in northern Iowa. I have never seen a transaction receive more media attention. Even the $30,000 per acre sale did not receive such coverage. The media reported that $5 million was being invested. Some reports did not make it clear that the $5 million was to include several other properties, as well. It was not (we believe) $5 million for this one farm. This seems to be a private transaction so details are a bit sketchy yet. Iowa is an open-records state, so this will become public information once recorded in the county courthouse.