Early online land auctions draw strong bidding, signaling market strength
The start of a new year often offers a bit of suspense as farmers and investors alike watch early land auctions for indications of strength. And based on two recent online auctions, the farmland market appears to be in very good health.
“Results are encouraging, because they show a continuation of the underlying strength we’ve been seeing for about eight months now,” said Max Steffes, representative for the recent auctions of land in Clay County, Minnesota, and Bottineau County, North Dakota. “We haven’t had a lot of land on the market in recent months, so simple supply and demand is also contributing to strength. This is especially true with neighboring farmers who in some cases have waited for years for a chance to buy a piece of land,” he said.
The Minnesota farm consisted of 160 acres of premium Red River Valley farmland and attracted 21 bidders. It included 156 acres of cropland, with a Productivity Index of 92.8. The competition resulted in a sale price of $866,000, or $5,551 per cropland acre, with an investor emerging as the high bidder.
The North Dakota auction of 160 acres (138 cropland acres) attracted 14 bidders, ultimately selling to a farmer for $321,000 ($2,326 per acre of cropland).
“Both of these were outstanding results. The difference in the price per acre reflects location and land,” said Steffes.
The company’s timed online markets continue to get results that are comparable to those of live auctions, said Steffes. “These are especially effective in promoting competition among neighboring landowners, who are more comfortable bidding against each other online than they might be face to face,” he said.
In addition, he said, the online format is often preferred by sellers who are one or two generations removed from the farming operation itself and who often live in other areas.