Today's Land Owner

Spring 2022 Volume XLII No 1

Today's Land Market

Dennis Reyman, AFM, ARA
ARTICLE SUMMARY:
The past six months have seen the continuation of rapidly rising land values which began in the Fall of 2020. Wellknown surveys have documented double-digit gains in a short period of time. For example, the Chicago Fed’s Ag Letter posted their survey of banker’s opinions which showed a 14% gain in the value of good western Iowa farmland in the 4th quarter. We had a specific appraisal assignment to update an early October appraisal in early January. The result, based on a good set of recent comparable sales both times, was 16% higher. We sorted our land sale database for all sales in our 23-county territory which were at least 85% tillable cropland. Between January 1, 2021 and March 23, 2022 we found 412 sales that met that criteria with no other substantial items contributing to value. We found the average sale outcome to be just over $13,000 per acre with standard deviation of $3,500. That would place most sales between $9,500 and $16,500 per acre. The average transaction size was $1.4 million with 75% being $1 million or larger. 88% sold for $10,000 per acre or more.

World Events Influence Grain Price

Nathan Deters, AFM
ARTICLE SUMMARY:
One of the advantages (and sometimes exasperations) of working in agriculture is that each day and season brings a set of news to take into account when making production and marketing decisions. Few times in recent memory has the news cycle been more volatile than the last several months. On top of the usual catalyst of weather, this year also has brought the highest inflation since the late 70’s and most recently a war in the Ukraine. All these factors have been very supportive of grain prices, with current cash bids up to the levels seen at the peak of last spring’s rally, and new crop levels exceeding last year’s top prices.

Is Renewable Diesel the Next Big Thing?

Grant Aschinger, AFM
ARTICLE SUMMARY:
Anybody who has been involved in corn production knows the role ethanol has played in helping corn farmers be more profitable. Now it appears that soybeans may have found their renewable fuel market as well. Demand for renewable fuels is building with the biggest push coming from west coast states. California has the Low-Carbon Fuel Standard, which pushes the use of fuels with lower greenhouse gas emissions. Washington and Oregon also look to be early adopters. Renewable diesel is not the same as biodiesel, although they do share some of the same feed stocks. Biodiesel can only be blended with petroleum based diesel at a 20% rate according to the Energy Information Administration. Renewable diesel can be blended with petroleum based diesel at any level, giving it more f lexibility and potential upside when it comes to demand.

Stalcup Announces Acquisition

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ARTICLE SUMMARY:
Stalcup Ag Service is honored to announce the acquisition of Dunlap Appraisal & Agri Management of Sioux Falls, South Dakota. Dunlap Appraisal & Agri Management was founded by James Dunlap in 1975, specializing in the appraisal of agricultural properties and farm management in Eastern South Dakota. Dunlap has a well-known reputation of expertise and first-rate customer service. Former Dunlap Agri Management farm manager, Vince Hanson will continue serving clients alongside Chad Husman, Dennis Reyman and Kent Smith.

2022 Outlook

Chad Husman, AFM
ARTICLE SUMMARY:
Every spring we look forward to the growing season thinking about what lies ahead. Just like every year, there will inevitably be areas in the country with great crops and areas with poor crops. Forecasting crop results this time of year with any accuracy is impossible, but there are several factors we take note of.

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