A wave of farmland sales bringing $8,000 per acre and higher rolled across Iowa last month, prompting farmers, realtors and lenders to ask: "How high will land prices go?"
According to the Des Moines Register, a 50 percent rise in the price of corn since June is putting more cash in the pockets of farmers, who in turn are bidding up the price of land at the traditional post-harvest auctions.
On Tuesday, a 120-acre parcel near McCallsburg in northern Story County, with two wet spots, sold for $8,100 per acre at auction in Nevada.
A year ago, that price would have been considered exceptional. But it seemed almost ho-hum compared with an auction sale last month in cattle-rich Sioux County for $13,950 per acre.
"Farms are throwing off a lot of cash now, and farmers have it to spend," said land broker Henry Joe Sandve of Marshalltown. "Everybody's bullish on farmland."
Farmland represents the bulk of the wealth and borrowing power of Iowa agriculture, which accounts for one-quarter of the state's economy and is a major driver of Iowa's manufacturers and seed companies.
A week ago Deere & Co. said 2010 and 2011 will be two of the most profitable years in agriculture's history.
Source: Des Moines Register