While much of 2020 has felt like shaky ground, good-quality farmland remains a rock-solid investment. The global pandemic as reflected in the land market reveals more impact on process than prices, according to farmland managers and appraisers in several Midwest states.
In Iowa, Dennis Reyman says although sales of farmland “paused” for a couple months when news of COVID-19 broke, values overall have remained steady. The global pandemic brought farmland sales in Iowa to a near standstill for about 60 days, but farmland values have stayed stable throughout the year and the auction pace is picking up for fall, says Reyman, a partner at Stalcup Ag Service at Storm Lake in northwest Iowa. Listings increased versus auctions during the second quarter, particularly on land lower than Grade A. Steady is the story on good land,” adds Reyman, an accredited farm manager, accredited rural appraiser and president-elect of the American Society of Farm Managers and Rural Appraisers. ASFMRA, the nation’s largest professional association for rural property land experts, sponsored the national land price webinar Aug. 25 to discuss price trends on rural property, the impacts of COVID-19 on the market, and who is buying and selling land.
“We had a very strong run in land values in the Midwest starting in 2003-04 and continuing through 2013-14. During 2015-16, it settled back and has maintained about steady ever since,” Reyman says. “If land is off-quality or irregular, there is less enthusiasm toward purchasing, and that is certainly where any softness in the market is going to show up first. In Iowa and throughout the Corn Belt, the big driver for land values is corn prices. “We track daily prices, and we’ve been in a similar pattern the past five or six years,” Reyman says. “We’ve been below $3 a bushel for a preharvest low in all but two of those years. The October average rises 25 cents a bushel or more above the low. Postharvest highs usually come in the spring to summer, with 10% to 30% increases from the October average.”