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MT. JULIET, Tenn. (DTN) -- A spate of farmland auctions in Iowa resulted in no sales in February. However, another auction settled just $400 per acre shy of a state record.

"That's the weird thing about this market," Doug Hensley, president of real estate services at Hertz Farm Management, told DTN. "It's not weak, but people are protecting their liquidity in a different way than they were. The reality is there's plenty of cash if people want to use it."

In his conversations with landowners this winter, Hensley used an analogy of a space shuttle launch to describe the market from 2020 to 2023. He used a different image -- one of a space shuttle landing -- to describe midsummer 2023 to today.

"We've come to this plateau. Very few new highs have been made in the market in the last six to nine months," he told DTN. Higher interest rates have made borrowing to buy land more expensive while giving investors attractive alternatives. Farmers are likely to draw on their liquidity this year as commodity prices and farm incomes fall.

As a result of tough conditions, fewer farms have been brought to market in the second half of 2023 and early 2024. Most are retirements and estate sales, Hensley said. That's generally supporting prices, although the situation will be different from neighborhood to neighborhood.

"When something comes up in one of those really tightly held areas, even if all the economic factors are saying it should be weaker, you may have a strong sale for a nice 80 or quarter section because it's hard to buy in certain neighborhoods. I think this market will become more localized this year because of that."

That was the case with a recent sale in Sioux County, Iowa, that brought $29,600 per acre, Hensley said. The farm had been in the family for several generations and had a corn suitability rating of 2 (CSR2) above 99. It's also in a livestock area with lots of access to manure.

"There are some localized realities in that market that come to the surface when something comes to the public market," Hensley said.

But in other areas, sellers' hopes have been disappointed when their reserve prices haven't been met, resulting in no sale at auction. "A lot of sellers are still focused on what they may have been able to achieve with a sale a year ago, and quite frankly, some of those folks are just late to the market. It is not the same market that it was."

As the market shot higher from 2020-23, no one wanted to put a price tag on the farm because they'd leave money on the table. Auction is the sale method of choice in an up-trending market.

Hensley thinks private treaty sales, sealed-bid auctions and other sales methods will become more popular as the market mellows.

"Farmers drive the market up. Farmers drive the market down if it ever moves down," he said. "We're just seeing an unprofitable situation setting up for 2024, and so people are becoming really discriminating as to where they're going to use their cash."

Katie Dehlinger can be reached at

Follow her on X, formerly known as Twitter, @KatieD_DTN

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See What 100 Years Can Do

In July 2016, Farm Credit marked 100 years of support for rural communities and agriculture, a milestone celebrated throughout the year and now drawing to a close. See highlights from Farm Credit's year-long centennial celebration. 

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