Today's Land Owner

Fall 2021 Volume XLIV No 3

Today's Land Market

Dennis Reyman, AFM, ARA
ARTICLE SUMMARY:
Each day, Paul Harvey would say, “You know what the news is… now you’re going to hear….. the REST of the story!” You already know how the land market is behaving in 2021, it’s higher! The September survey from the Iowa Realtor’s Land Institute (broker’s opinions, including ours) placed the past six months at 14% to 22% higher, depending on the area of the state. No one would quarrel, except perhaps they think it’s higher than that. In certain areas it actually is, and that’s based on a good number of sales. However, let’s look at the land market as a whole, including all the counties in the northwestern part of Iowa, from Lyon to Kossuth along the MN border, down to Greene and over to Monona along the Missouri River. That’s 23 counties which comprises much of our trade territory.

NW IA Progress Report

Chad Husman, AFM
ARTICLE SUMMARY:
Drought was the number one fear of farmers in the Midwest this growing season. Last year’s late summer “flash drought” left soil moisture reserves below normal. There was enough rain and snow in the fall of 2020 and early spring 2021 to recharge the topsoil but deep soil moisture was low. According to Iowa State University’s benchmark data in April this year, the depth to water table in the northwest district was a record 2 feet below normal and nearly 3 feet below the spring of 2020. The extended drought persisted through early spring, hitting peak severity in June which is typically our wettest month of the year. At that point, season cumulative rainfall amounts were 50% to 80% below normal. To make matters worse, temperatures were well above average nearly every day in June. It seemed the crop was in real trouble.

Grain Markets

Grant Aschinger, AFM
ARTICLE SUMMARY:
Is it worth trying to store the 2021 corn crop if you don’t own grain storage? This is a common question during harvest. It’s not a simple yes or no answer as there are a number of factors that must be considered. One question that must be answered is the timing of sales and income. Producers who do not have adequate storage for all of their crop (most farmers) sell a portion of their production throughout the 12 or more months leading up to harvest. This avoids storage costs and still allows flexibility to receive the income shortly after delivery or defer the income into January of the following year, which is a common tax planning strategy. We usually need to receive income at harvest to begin paying for the next year’s crop inputs as some fertilizers can be applied following harvest.

2022 Crop Input Prices

Nathan Deters, AFM
ARTICLE SUMMARY:
2021 crop margins will be very good, thanks to excellent crops in most areas, combined with some of the best grain prices we have seen in many years. 2022 may be more of a challenge. Why? Higher input costs are on the way. We will start with fertilizer. The primary macro nutrients for corn and soybean production are phosphorus and potassium (potash), along with nitrogen, which is necessary for corn production. All three products are facing price spikes from a confluence of factors. First off, an increase was already expected, as fertilizer prices always follow grain prices higher. On top of this came logistic concerns. The covid pandemic has stressed supply lines and dramatically increased shipping rates. Since fertilizer is a world commodity, and much of our products come from overseas, these costs are passed on. Hurricane Ida has compounded the logistics issue, as it damaged fertilizer manufacturing and shipping facilities at the mouth of the Mississippi.
ARTICLE SUMMARY:

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