This week, three tracts of cropland totaling 121.3 acres sold for $2.425 million, or $19,984 per acre, in northeast Indiana.
“Several things are noteworthy about this result,” says R.D. Schrader, president of Schrader Real Estate and Auction Company who conducted the sale. “It’s rare to see prices per acre in the $20,000 range with all the serious competition coming from local operators. We had investors in the room, but they dropped out quickly as bidders focused their attention on the farm as an entirety.”
The average price per acre for top quality farmland in Indiana is $12,808 and $10,598 for average quality farmland, according to the Indiana Farmland Value and Cash Rent Survey released in August 2022. Farmland prices rose by 30% on average quality farmland from June 2021 to June 2022.
The farm that sold on Tuesday is near the Indiana-Ohio border, running along SR 101 and Edgerton Road in east Allen County. The location attracted 25 bidders from Indiana and Ohio, according to Jerry Ehle, managing broker for the auction.
“A big plus was that the farm was rectangular, and the tracts were adjacent. The soils were primarily Hoytville silty clay with some pockets of Nappanee Silt Loam,” he adds.
The demand for farmland has remained strong, driven by competition for high quality farmland. “Farmers and investors may focus more on acquiring land as the planting season fast approaches. Interest rates have leveled off a bit, and farmland is an excellent investment for those seeking to avoid the volatility of stock and commodity markets. Farmland has also historically been a great hedge against inflation,” says Schrader.
While investors have been active bidders at many farmland sales like this one and have made the news with notable acquisitions, such as the purchase of this Iowa farmland by pro athletes, the majority of farmland is still purchased by local buyers. Farmers National Company reports seeing the traditional local farmer-operator as the successful buyer of farmland 75% of the time.
