Corn acerage question

LagoVistaFarm · #1 04/03/08, 12:18 PM

We have wanted to move to the NE corner of Iowa for the past couple of years. I’ve waited long enough so the move is going to start next month. We have a building to start storing our stuff in there, and since it will take at least three truckloads we want to take the summer to do it.

We have several options available from leasing a small farm to just buying a place. I’m concerned that the farm property may be over priced now due to the corn prices and wonder if we shouldn’t wait to buy more acreage in a bit. We have no plans to make a living from farming but do want pasture and space around us.

Any thoughts?

sammyd · #2 04/03/08, 12:36 PM

Buy it if you can.

blufford · #3 04/03/08, 01:49 PM

Maybe a long term lease with option to buy. If the real estate goes down in value you can buy it or attempt to renegoiate a lower selling price or just walk away when the lease expires.

ebook · #4 04/03/08, 05:15 PM

I live in Iowa and I try to follow the land prices as much as I can. In Northeast Iowa (don't know how far NE) you are going to see some pretty pricey land (I've heard as high as 6-9,000 per acre). There are those that think that the land prices will not bust this time like they did in the 80's because this time people actually have money behind purchases. That will keep the prices up is what the experts say.

If you aren't tied to a region of Iowa why not check out the Southeast. No trout streams or rocky bluffs, but some nice rolling hills and timber ... really a very diverse landscape. Prices in the Southeast and South will be lower as it is traditionally more pasture land than crop land. With that being said it is all climbing at this point!

What area are you thinking?

LagoVistaFarm · #5 04/03/08, 05:51 PM

We are centering our search around Waukon. We like it and it fits our distances to get to relatives but keeps us just far away enough. I'm not looking for a "bust" but just wondering if it may be a little overpriced at the moment. It may take a couple of years to sell off everything in CA but we have enough for a decent place already and what we will save on overhead will easily pay for another place.

wwubben · #6 04/03/08, 07:05 PM

Land here in iowa will probably not drop in price.Land is now being bought by people paying a large share down or cash.I would buy a piece now.Go to the area and take some time to shop around.You could rent out your crop land at a pretty high rate or sell the crop land at a higher price than the rougher land and still have what you want.As a previous person said------this is a way different deal than the eighties.

crafty2002 · #7 04/03/08, 07:29 PM

I don't see why the price of land, or lets say the value of it should be any different than anywhere else in the Us. The price for land doubled in Va. in about two years but I am already seeing some of it cheaper as some people are rethinking what they have done.
I seen a 21 acre tract that was sold for $72,900 about two years ago for sale again for $64 k a couple of weeks ago.
It may be different for farm land tho.
I would start looking and keep score on whether it's going up, down or staying the same. If you realize it is indeed still going up, I would buy fast. If it is staying the same or going down, I would hold off a little while just to see what's going to happen.
JMHO
Dennis

ebook · #8 04/03/08, 08:02 PM

I am with wwubben. The land probably won't drop, but it may keep going up. In my area, which isn't the best corn land ... but not the worst, cash rentals are between $200 and $250.

The area around Waukon is BEAUTIFUL! Great forests, nice hills, close to the river, trout streams, not to far from Cabela's ... I could go on and on. Get out here and get you some land!

ibcnya · #9 04/03/08, 09:21 PM

LVF, the price of real estate may be going down in California but not here in Iowa. Farm land is slowly dwindling so get your piece while you can. The urban sprawl in the last 30 years from the east to my home state is taking over slowly but surely. God only made so much of good Iowa farm land and to my knowledge he isn't going to make anymore in our lifetime.

EDDIE BUCK · #10 04/04/08, 12:49 AM

Like another poster said if you can get it in writing, go with rent with option to buy at an agreed on price. Also if you are thinking about renting some land to grow corn on, I would find out what that rent amount is, and how much the seed and fertilizer plus fuel and tractor upkeep is going to cost. I would talk to some locals about how that land has produced crops in the past. With the fuel and fert prices doubling (or close to it) since last year, you will need to have a bumper crop and get paid bumper prices for you to make a profit. I hope you have a bumper crop whatever you do. Eddie

Thoughthound · #11 04/04/08, 07:38 AM

The only way land prices will drop is if the demand for corn drops. The only way the demand for corn will drop is if ethanol fails and if the bottom drops out on ethanol, it probably won't be for several years. On the other hand, land prices could remain steady or even go up while you pay rent.

Be sure to look at soil surveys before you buy. The Iowa DNR has online maps that help and the USDA has archived info on every soil type. Ask the DNR about tile drainage maps. Also ask about glacial field stones. They play holy hell with tractor implements. Farmland prices will be dictated by the Corn Suitability Rating (CSR). Good CSR is above 80 and in the 90s, an acre will sell for around $5500. Acreage land is totally different. If you are buying less than 40 acres, expect to pay between 6000 and 10,000 per acre. Price is usually dictated by proximity to a city.

My advice would be to post an ad in the "Iowa Farm Bureau Spokesman" newspaper saying how much land you'd like to buy and for how much. See if you get any bites. Retired farmers like people who value family and if you hit it off he may sell reasonable and you will have made a valuable friend. If you go through a land broker, they will try to get the maximum out of you.

Also, Iowa State has a program that links people interested in farming with farmers who have no heirs. Basically you work for the farmer and eventually you inherit the farm.

Good luck.

rambler · #12 04/04/08, 11:56 AM

Farm land rises & falls. As the dollar gets cheaper, it will continue to rise. It is a 'real' thing, getting is value from world grain prices. It is not directly tied to USA ecconomy, as housing market is.

The problem with farm land: Wait until it's cheap, and no one sells it - just rents it out. When it is high priced, lots & lots for sale.

So if you see a piece you want, you need to buy it when it is for sale.

--->Paul

LagoVistaFarm · #13 04/04/08, 02:57 PM

Is there a middle ground? We've seen nice affordable land (don't forget we're used to CA prices) for years. We can get an ok place now but we should be able to get much nicer once we sell off everything here.