# Neighbor next to me farm sale



## Chessiedog

My neighbors farm was auctioned today . 243 acres About 1.6 million . Went 2 ways . House barns ,bins ,twenty acres 178,000 or about , other 2 tracts went together totaling about 229 acres with 196 tillable was 1.495 million .


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## haybaler101

Bargain price, did you buy? 120 here of flat black sandy loam coming up, should around 20.


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## Chessiedog

Yea , might be a bargain for some ... To rich for my blood .


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## discbinedr

Was that good dirt? Through here something like that would bring at least 3 mil.


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## Chessiedog

I would say it was . Maybe not the best but good .. And yes I'm sure it would have out where you are . Lots of Amish have bought ground around here last ten years from your area .


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## somedevildawg

discbinedr said:


> Was that good dirt? Through here something like that would bring at least 3 mil.


Man alive, farm land brings 14k an acre in PA? Does it have to have pivots? Wow.....I don't know how in the hell that can work out for farming.....

Here farm land is around 2-3.5k per acre.....but you have to amend heavily.


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## brandenburgcattle42

We are seeing good gound in Illinois bring $16K +and ok ground $10K all day long land prices r sill. Strait timber tract in western illinois for deer hunting bring 5-7K. Its pitiful. That is a bargin price for sure.


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## discbinedr

somedevildawg said:


> Man alive, farm land brings 14k an acre in PA? Does it have to have pivots? Wow.....I don't know how in the hell that can work out for farming.....
> Here farm land is around 2-3.5k per acre.....but you have to amend heavily.


Easily. Non-irrigated. My county will probably average over 200 bushels in corn this year. Rents as high as $450 an acre the past few years. Some of the best dirt in the world.


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## Chessiedog

brandenburgcattle42 said:


> We are seeing good gound in Illinois bring $16K +and ok ground $10K all day long land prices r sill. Strait timber tract in western illinois for deer hunting bring 5-7K. Its pitiful. That is a bargin price for sure.


I'm not really a row crop farmer ,but how could that work out for farming ? Seems like all you would do is lose money on it for twenty years and a lot of it .


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## carcajou

What would be the annual land taxes on a 1/4 section of that $14,000/acre land?


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## discbinedr

Don't know. Can't afford it.


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## brandenburgcattle42

Farmers don't buy ground for that much... investors do... put a half million down payment on 80 then it will pay. People are land hungry these days.


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## haybaler101

brandenburgcattle42 said:


> Farmers don't buy ground for that much... investors do... put a half million down payment on 80 then it will pay. People are land hungry these days.


Maybe in Illinois, but it is farmers buying here and most are putting a huge chunk down with CASH.


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## swmnhay

There was a sale here about a week ago with 3 parcels.

#1 was sold for $13,500 per acre.Buyer just sold JD dealership prly has some $ to burn.Large farmer also.

#2 was sold for around $10,500 local farmer bought it.

#3 was bought by "Chicken Phil" for around $9,500.MEGA egg producer.Supposedly largest land owner in Mn behind the State it self at 32,000 acres.He owns land in other states also.80+ yrs old.When is it enough???

Another farm was sold week before for $9500.Widow lady bought it for her BTO hog farmer to farm who reportedly pays her 5% of purchace price for rent = $475 per acre.She owns a lot of ground her husband bought during 80's farm crisis for 600-800 per acre.She prly pd cash!!!


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## somedevildawg

All of these people have something in common.....I don't care if the land does 250 bushels to the acre....do the math and tell me how that pencils out.....I certainly don't doubt what anyone is saying, just that unless you have money to burn, this ain't gonna work out unless you live an extraordinarily long life.....

Perhaps that's why we see so many foreclosures on farms.....someone failed to do the math

Quick question...down here it takes about $800 an acre to grow corn, we do have to amend heavily....what's it take up there?


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## swmnhay

somedevildawg said:


> Quick question...down here it takes about $80 an acre to grow corn, we do have to amend heavily....what's it take up there?


Seed $100
Fert $200
Chem $50
Eq $150
Ins $30
Int $30
Drying $50
Hauling $20

Ballpark around $630 to produce acre of corn not includeing land costs.


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## mlappin

somedevildawg said:


> Quick question...down here it takes about $80 an acre to grow corn, we do have to amend heavily....what's it take up there?


I'd love to only have $80/acre in raising corn.


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## discbinedr

somedevildawg said:


> All of these people have something in common.....I don't care if the land does 250 bushels to the acre....do the math and tell me how that pencils out.....I certainly don't doubt what anyone is saying, just that unless you have money to burn, this ain't gonna work out unless you live an extraordinarily long life.....
> Perhaps that's why we see so many foreclosures on farms.....someone failed to do the math
> Quick question...down here it takes about $80 an acre to grow corn, we do have to amend heavily....what's it take up there?


You have to remember that if properly fertilized land never wears out like equipment and will likely increase in value above the rate of inflation. So your real costs are taxes and return on investment.


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## swmnhay

OOOps my numbers were a little off.$13,000 was the high.

http://www.dglobe.com/content/land-sale-sets-new-record-nobles-county


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## somedevildawg

discbinedr said:


> You have to remember that if properly fertilized land never wears out like equipment and will likely increase in value above the rate of inflation. So your real costs are taxes and return on investment.


I agree with that, its that ROI I'm worried about...


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## swmnhay

Hmmmm,Interest rates went up .8% this week.


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## rjmoses

swmnhay said:


> Hmmmm,Interest rates went up .8% this week.


I've been expecting significant (and I mean really big!) jumps interest rates for the past several years.

Here's why: The easiest, and most politically viable, solution to the massive local, state and federal debt and overwhelming demands of pension programs is to do nothing. Big jumps in the interest rates make the dollar worth less and allow the debts and pension demands to be paid off with a dollar that isn't worth anything.

Imagine a loaf of bread costing $10, a gallon of milk $15. High interest rates will trigger high inflation (we're already seeing $4 gas). Those trillions of dollars owed can be paid off with worthless dollars. Those pension programs of $100,000/year might pay the rent and a few groceries.

And nobody will be blamable. Yes, the banks will take some hear, but so what! The Federal Reserve will say they can't do anything. But people on fixed income will take it in the tail feathers.

http://www.cnbc.com/id/100990929?__source=yahoo|finance|headline|headline|story&par=yahoo&doc=100990929|Get ready for a 'massive

So buying $10,000/acre land at 4% interest might be a wise move.

Ralph


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## mlappin

Something else that is not being mentioned, you can rent land forever but can only use the equity in it if you own it.


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## Chessiedog

haybaler101 said:


> Maybe in Illinois, but it is farmers buying here and most are putting a huge chunk down with CASH.


It was an investor that bought this piece . There have been quite a few buying ground around here last couple of years . Though not all . Last year 700 acre farm sold . The best piece fairly square 100 acres was bought by local farmer for 10,000 acre .

The next to last bid on this piece was a neighboring farmer also .


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## haybaler101

somedevildawg said:


> All of these people have something in common.....I don't care if the land does 250 bushels to the acre....do the math and tell me how that pencils out.....I certainly don't doubt what anyone is saying, just that unless you have money to burn, this ain't gonna work out unless you live an extraordinarily long life.....
> 
> Perhaps that's why we see so many foreclosures on farms.....someone failed to do the math
> 
> Quick question...down here it takes about $80 an acre to grow corn, we do have to amend heavily....what's it take up there?


Buying land has never really "pencilled out". The farmers buying land here have three things in common; 1, they farm anywhere from 2000 to 20000 acres, 2, they have had very lucrative years the past 4 or 5 years (even last year was good for most with crop insurance revenues) and 3, they are paying cash for the a big chunk of the land. SWMN already showed us the cost for an acre of corn at $630. These guys have been grossing somewhere around a $1000/acre/year. That leaves $370 to labor, managament and land. Let's say the farmer owns 2000 acres free and clear, there is $740,000 year sitting there to dispose of and he rents another 2000 at a modest 250/acre (fairly average here especially if it is a long term relationship with a landlord). So there is another $240,000 in the bank. Do this for a couple of years and now you see where they can drop a couple of million on piece of land, or the shed is full of shiny green paint, or the elevator leg and bins loom larger than life. Yes, there will be some foreclosures, but this is different than the 80's when guys were leveraged to the hilt and then land prices receded.


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## swmnhay

haybaler101 said:


> Buying land has never really "pencilled out". The farmers buying land here have three things in common; 1, they farm anywhere from 2000 to 20000 acres, 2, they have had very lucrative years the past 4 or 5 years (even last year was good for most with crop insurance revenues) and 3, they are paying cash for the a big chunk of the land. .


#4 Farmers selling land near the cities for 80-100K per acre have money to burn and need to reinvest it to avoid capital gains taxes.(1031 exchange)They hook up with local BTO's to have it custom farmed.

#5 Some have filed banckruptcy in the past and seem to have $$ to burn now while the rest of us payed our bills.

#6 They have other businesses that are profitable or have sold and want to invest the $ elsewhere.

Hard to compete with any of the above!!!!


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## somedevildawg

Been hayin.....I think they also have something else in common....a big something else, welfare....the numbers those guys collect is staggering....perhaps that's the payoff?

regardless, it's gotta be comin from somewhere else than crops to justify those kinda numbers IMHO

Btw, typo in earlier post, 800 pa for corn here.....obviously not 80..... Average here is 225 bpa...so far this year....some have been bumping 300......but even dry land corn is great this year, that usually doesn't happen....


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## swmnhay

somedevildawg said:


> Been hayin.....I think they also have something else in common....a big something else, welfare....the numbers those guys collect is staggering....perhaps that's the payoff?
> 
> regardless, it's gotta be comin from somewhere else than crops to justify those kinda numbers IMHO
> 
> Btw, typo in earlier post, 800 pa for corn here.....obviously not 80..... Average here is 225 bpa...so far this year....some have been bumping 300......but even dry land corn is great this year, that usually doesn't happen....


The WELFARE for farming is there but not as much as some claim.I have had a lot of hay acres so my Welfare for corn acres is lower then most and will be under $10 per acre on what I farm this yr.I'm about ready to drop out of the program because of stipulatins they put on some converted wetland acres I farm.No annual crops allowed on them.

The bigger subsidy is crop insurance.It has taken risk out of farming and one of the reasons rent and land prices have skyrocketed.Sounds like they may tie crop insurance to soil conservation rules and drop the DCP program payments.

Yea $80 to plant corn was a tad bit low,lol.


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## brandenburgcattle42

The farmer buyn ground like this r also subsidizing the land payment off all the other acres they r farmn. $10 an acre off 10, 000 acres... no problem buyn ground especially with 30% or 40% down


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