At the kickoff of fourth quarter 2022, the end of the year is truly right around the corner. When we wrapped up 2021, Iowa had such a high quantity of auctions, along with historically high prices, that 2022’s uncertainty for land values seemed higher than usual: Would the inventory run dry? Did those that wanted to buy land already purchase farms in 2021? Or would investors continue to diversify, local farmers have strong enough balance sheets to continue to participate in local sales, and farms continue to change hands?
With the first three quarters of 2022, we see that auction activity has stayed consistent—we’re still seeing many farms come to the auction block, and prices are generally staying strong.
Over the past few quarters, we’ve seen that auctions are still going strong: Iowa saw an increase in average $/CSR2 from $170 in Q4 2021 to $174 in Q1 2022 (+2%) to $188 in Q2 2022 (+8%). The quantity of auctions has also increased: Over the past five years, Q1 and Q2 typically see between 120-180 tracts sell per quarter. In 2022, Q1 saw 234 tracts, and Q2 saw 296. In Q3 2022 we tracked 277 auction tracts that sold for an average dollar per CSR2 point of $181. That’s a 6% decrease in auction volume and 4% decrease in average value since last quarter.
Though we’ve seen a decrease in $/CSR2 in Quarter 3 as compared to Quarter 2, and a decrease in auction activity as compared to the previous few quarters, we’re still seeing higher prices than we were a year ago, and more auctions sold over the past few quarters than we’ve seen the past few years.
