Last year, $7 corn seemed to justify top-notch land at more than $6,000 an acre. Today, corn prices are hovering around $4 a bushel. What's that mean for land prices? Apparently, not too much.
I hung around the Kilton Farms Inc. Auction today (Jan. 21). Within the first 15 minutes, folks were bidding more than $6,000 an acre for flat, black and square tracts.
The crowd for the Kilton Farms Inc. Auction didn't disappoint. Aumann Auctions expected around 1,000 people to attend. For spectators arriving late, it was standing room only
A total of 3,912 acres was split into 43 tracts for the auction. The land was spread over Montgomery and Macoupin Counties.
After the auction, I spoke with Kent Aumann, an appraiser and realty Associate with Aumann. He said a group of four growers and six investors/friends purchased approximately 2,250 acres at an average price of $6,200 an acre. Aumann explained that the group of farmers had been renting the land for quite some time from Kilton Farms Inc.
Another large chunk was sold to an investor from Highland. Aumann said he bought a total of 630 acres for approximately $3.3 million. Detailed buyer information will be released at closing, which is scheduled for Feb. 25.
According to Aumann, the auction's average sale price was just under $6,000 an acre. Once the 4% buyer's premium was tacked on, the average price rose to about $6,220.
Check out the March Prairie Farmer for analysis on what sort of tone this auction sets for 2009.
In the meantime, what's your take on land prices in the midst of $4 corn?
Registered users may comment on this blog.