Who Sells Land When Prices are High?

Inside Dakota Ag

Who sells land when it's high? I figure it's retired farmers, heirs and investors. Not active farmers. But I was wrong.

Published on: May 5, 2010

Who sells farmland when prices are high?

I figured it would be strictly retired farmers, widows, institutions and investors. Not an active farmer who has another 15-20 crops to plant. But I was wrong.

I met Todd Intermill, of Colman, S.D., last week and he told me he sold 80 acres this spring and got top dollar.

Why did he sell?

Was he going broke?

Did he need the cash to stay pay off bills?

No, he sold, he said, because buying low and selling high is how you make money.

Pretty simple.

It's also a strategy farm manager advisors like David Knoll, formerly of Virginia Tech, recommend to reduce your risk exposure to higher interest rates.

Accumulate cash, they say.

It wasn't hard to sell the land, Intermill said. He wasn't attached to it sentimentally. He doesn't farm family land.

And Intermill has bought low and sold high before. He was an early investor in ethanol plants. Like a lot of South Dakota farmers, he helped a build a couple facilities. But he sold nearly all his stock before the recent downturn in the industry. Ethanol stocks were still sky-high. Corn prices hadn't spiked, catching ethanol companies on the wrong side of the market and sending some into bankruptcy.

"Sure going to miss you," is how one ethanol plant manager greeted the news that Intermill was getting out. "We're having a great year."

"I'll be back," Intermill responded.

And he recently repurchased ethanol stock.

Intermill said don't be surprised to see him buying land again in a few years – if prices are 30-40% lower than they are now.