Agriculture Land Sales: A Booming Market Where Cash Is King

GUNDER, IA - AUGUST 17: Weeds grow up around ...

It seems like most areas of commercial real estate are suffering from a financing drought.  Credit resources are at a premium thanks to banks cutting back on lending, a contracted market for securitized property deals have kept a cry for easier credit high on commercial practitioner want lists for three years.

Naturally all real estate is local, so it’s tough to make a claim for an entire sector.  Discussion in the wake of the Realtors Land Institute meeting in Denver is finding that one market not subject to credit crunch conditions is Iowa’s agricultural land.

These property prices have been on the steady rise, and it’s one market, according to This Week In Agribusiness, that is driven not by debt, but by cash purchases. Sales are split between expansion farmers  — farmers reinvesting healthy crop profits into new land acquisitions — and investors.

So where’s the cash coming from? Agricultural business as usual. An uptrend in crop prices haven’t hurt the pocketbooks of ag landowners.  These prices have followed a fall in supply across a range of staple grains, says the USDA.

Max Armstrong of the syndicated television show, This Week in Agribusiness,  interviewed Accredited Land Consultants (ALCS) and speakers at the 2012 National Land Conference held on March 26-28. Chuck Wingert, ALC, President Elect; George Clift, ALC, Vice President; Kirk Weih, ALC, and Bob Turner, ALC were interviewed along with presenters Dr. Mark Dotzour, Chief Economist and Director of Research at Texas A&M, and K.C. Conway, CRE, MAI. They discussed the economic outlook, lending and land values. Watch the first of these interviews here.

Leave a Reply