Iowa Farmland Sells for $26,750 an Acre

Two days before Christmas, a land auction in northwest Iowa brought an early gift for the owners of a 76.56-acre farm when it sold for a whopping $2,047,980. The farm was split equally into two 38.28-acre tracts and, according to the agent handling the sale, checks all the boxes when a buyer is looking for land.

Mark Zomer, one of the owners of Zomer Company Realty and Auction whose company sold the land, wasn’t surprised it brought such a high price. “Really good farms sell really well,” he said. “And this is a good one in our area.” He says there was a lot of interest in the sale and estimates about a thousand people watched the auction online and 50-60 people watched it in person. 

Four local farmers and one investor who lived outside the area were active in the bidding, which started at $17,000 an acre and moved quickly to the final price of $26,750 an acre. One of the farmers involved in the bidding bought both tracts. He owns property a few miles away and plans to farm the land himself, starting this year.

Sellers

James and Gloria Bleyenberg and Terry and Gayle Bonestroo were the owners of the land. According to the selling agent, the two women, who are sisters, along with their husbands, inherited the property from their parents who farmed the land for many decades. Zomer says the women are at retirement age, which was a factor in their decision to sell. The previous owners didn’t farm, but they rented the land to family members who have a farm operation.

About the Land

The land sits southwest of Hull in Sioux County, Iowa. This area of the state is known for the quality of its land and where a farmland sale earlier in 2024 brought a near record-breaking $29,600. 

Zomer said it was a desirable property for a lot of reasons. First, the land has a 94.3 to 95.5 corn suitability rating index (CSR2). This is a rating system unique to Iowa that determines the productivity potential of the land, with 100 being the best. With this high productivity soil, the land produces between 220 and 280 bushels per acre (bpa) of corn. Second, the land is flat with half mile rows that make fieldwork easier. And lastly, the land has a good drainage tile system.

Tract 1

• Price Loss Coverage (PLC) program yield of 189 bpa for corn and 55 bpa for soybeans
• CSR1 rating of 70.8
• Classified as non-highly erodible land
• Soil types include: 310B2-Galva, 91-Primghar, 310B-Galva, 91B-Primghar, 92-Marcus, and 31-Afton
• 37.8 tillable acres with the balance in road and ditch

Tract 2

• PLC yield of 189 bpa for corn and 55 bpa for soybeans
• CSR1 rating of 71.4
• Classified as non-highly erodible land
• Soil types include: 91-Primghar, 92-Marcus, 310B-Galva 
• 37.8 tillable acres with the balance in road and ditch

The real estate taxes on tracts 1 and 2 combined are $2,876, according to the Sioux County Treasurer.

Economic Perspective

The selling price for this land was significantly higher than Iowa’s statewide average, which experienced a modest decline last year. The 2024 Iowa State University Land Value Survey reported a 3.1% decrease to $11,467 per acre for average Iowa farmland values from November 2023 to November 2024. This represents a decrease of $369 per acre. 

The survey also shows averages for each Iowa county. Sioux County, where the land from this sale is located, has average farmland values of $15,617, which is much higher than the state-wide average.

The findings show most counties and regions experiencing a relatively small adjustment in land values. The report says downward pressures are largely attributable to some of the same things impacting farmers and landowners all over the Midwest: persistently high interest rates, lower commodity prices, increasing input prices, and weather uncertainty. 

The Federal Reserve Bank of Chicago also monitors farmland values in Iowa along with most of Indiana, Michigan, and Wisconsin. In its most recent AgLetter, economist David Oppedahl says surveys show that region had no year-over-year change in its agricultural land values in the third quarter of 2024. This is the first time that’s happened since 2019. 

When asked if higher quality land, like this farm, could be immune to falling land values, Oppedahl said, “There isn’t anything to lead us to think that there is immunity to changes in the economy and farm environment.” But, he thinks there could be a slowdown in interest from outside investors. 

Where do values go from here? “Not up, based on the respondents to our survey,” Oppedahl said. Last quarter 34% expected lower farmland values in Q4 of 2024, while only 2% expected higher farmland values at year end. Still, the majority of respondents expected stable farmland values.” 

As for Zomer, he says it’s hard to tell what the next year will look like. He uses two of his most recent auctions as an example of why it’s hard to gauge these things. While this farmland sold for $26,750 an acre, a similar high-quality farm about a mile away sold for $23,400 an acre. But, overall, he thinks good farms – with a high CSR2 and prime location – may better weather falling land values than lower quality farms.

Carbon Easement

The land sales are subject to a Dakota Access Pipeline easement and the sellers signed an easement with Summit Carbon Solutions, according to the legal description of the property.

Easements become part of the land record and remain in place when the property changes hands, Jennifer Harrington explains. Harrington is the staff attorney at Iowa State University’s Center for Agricultural Law and Taxation (CALT) and frequently fields questions about easements as part of her work.

She says the Summit easements were negotiated privately, case by case, so it’s hard to know the details of the easement. Based on the feedback from farmland owners and counsel that reached out to CALT, agreements with the pipeline company “varied wildly.” She added, “It seems like what got recorded [in the land record] isn’t the complete agreement, so you don’t know what the easement payments are.”

Harrington explained, pipeline companies use easement agreements rather than leases for situations just like this. “They want to make sure that when a sale happens, they still have the right to be there.”

Produced in partnership with American Farmland Owner (AFO). AFO aims to help landowners make informed decisions for their farmland while ensuring the prosperity of American agriculture.