Click here to close now.


News Feed Item

Farmland still good investment, with farms on solid footing

COLUMBIA CITY, Ind., March 13, 2014 /PRNewswire/ -- Demand for farmland remains strong, and recent land prices are fundamentally sound even after several years of surging prices, farmland auctioneer R.D. Schrader told farmers, farmland investors, bankers and others in a series of updates on the current market.

Schrader, president of Schrader Real Estate and Auction Company, offered his comments in briefings held in Sarasota, Boston and Indianapolis.

"Farmland values may have attracted a lot of attention during the past few years, but those with a longer frame of reference understand that we didn't get here overnight. Farmland values have gone up in 25 of the last 26 years, and yet valuations continue to be well founded," said Schrader. 

He reviewed data from a variety of sources, including the Chicago Federal Reserve Bank, the National Agricultural Statistics Services, Purdue University and Iowa State University, showing that while some states and time periods were weaker than others, the overall upward trend remains intact.

Much of the increase during 2013 occurred during the first half of the year, he acknowledged. Even so, the Federal Reserve reported a 6 percent increase through Jan. 1, 2014, in the price of "good" farmland for the five states in the Seventh District (Illinois, Indiana, Iowa, Michigan and Wisconsin). The only state in the district showing a decrease for the year was Iowa, for which the Federal Reserve noted a 2 percent decline for the entire year.

"America's farms are on a solid footing. It's been farmers, the operators, that have been driving this market. It wasn't 100 percent financing that got us here," he said.

"Debt-to-equity ratios are in a 10-13 percent range – as low as they've been in the last 50 years," said Schrader, also noting that debt-to-income ratios are "awfully good, though changes in income and farmland values will change those ratios."

Schrader said softening corn and soybean prices may be a challenge to farm incomes going forward. "Volatile corn prices, especially, have been a concern, with current prices very close to the breakeven point for many farmers. While some operators may struggle with income fluctuations, the industry as a whole remains strong. The dynamics today differ starkly from those of the 1970s leading into the 1980s," he said.

Among other factors that tend to impact farmland prices, interest rates remain at historic lows and government support for ethanol is likely to continue at current levels, he said.

"The big elephant in the room as far as demand goes is these world populations and rising incomes," said Schrader, citing figures showing that by 2050, the world population will require a 100 percent increase in the world food supply. "Growth in other countries' populations and wealth will have a big impact on the demand side for U.S. agriculture. On the supply side, it will be interesting to see how the technology keeps production growing to meet demand," he said.

In evaluating values achieved in recent sales, Schrader said it's important to be mindful of the soils and productivity of a given farm.

"It's critical to get an apples to apples comparison. We've had a lot of cases where people compare farms in a specific county without taking into account the difference in soils," said Schrader. To illustrate his point, he pointed to three adjacent properties sold by Schrader on the same day – Nov. 15, 2012 – in Pulaski County, Ind. The best land sold for $10,576 per acre, while the tracts with more trees or poorer soil brought $4,500 per acre and $4,083 per acre.

"This was the same auction company, with all the same buyers, with all the same money in their pockets," said Schrader. The tract with sandy loam soil, he said, brought more than twice a neighboring tract with poorer soil.

Schrader Real Estate and Auction Company, based in Columbia City, Ind., is a leading auctioneer of agricultural land throughout the United States and is a four-time USA Today/National Auctioneers Association Auction of the Year Winner, as well as a two-time winner of the Grand Champion Marketing Award of Excellence.

For more information:
Carl Carter, 205-823-3273

SOURCE Schrader Real Estate and Auction Company

More Stories By PR Newswire

Copyright © 2007 PR Newswire. All rights reserved. Republication or redistribution of PRNewswire content is expressly prohibited without the prior written consent of PRNewswire. PRNewswire shall not be liable for any errors or delays in the content, or for any actions taken in reliance thereon.

Latest Stories
“All our customers are looking at the cloud ecosystem as an important part of their overall product strategy. Some see it evolve as a multi-cloud / hybrid cloud strategy, while others are embracing all forms of cloud offerings like PaaS, IaaS and SaaS in their solutions,” noted Suhas Joshi, Vice President – Technology, at Harbinger Group, in this exclusive Q&A with Cloud Expo Conference Chair Roger Strukhoff.
SYS-CON Events announced today that JFrog, maker of Artifactory, the popular Binary Repository Manager, will exhibit at SYS-CON's @DevOpsSummit Silicon Valley, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Based in California, Israel and France, founded by longtime field-experts, JFrog, creator of Artifactory and Bintray, has provided the market with the first Binary Repository solution and a software distribution social platform.
SYS-CON Events announced today that Agema Systems will exhibit at the 17th International Cloud Expo®, which will take place on November 3-5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Agema Systems is the leading provider of critical white-box rack solutions to data centers through the major integrators and value added distribution channels.
Clearly the way forward is to move to cloud be it bare metal, VMs or containers. One aspect of the current public clouds that is slowing this cloud migration is cloud lock-in. Every cloud vendor is trying to make it very difficult to move out once a customer has chosen their cloud. In his session at 17th Cloud Expo, Naveen Nimmu, CEO of Clouber, Inc., will advocate that making the inter-cloud migration as simple as changing airlines would help the entire industry to quickly adopt the cloud wit...
Learn how Backup as a Service can help your customer base protect their data. In his session at 17th Cloud Expo, Stefaan Vervaet, Director of Strategic Alliances at HGST, will discuss the challenges of data protection in an era of exploding storage requirements, show you the benefits of a backup service for your cloud customers, and explain how the HGST Active Archive and CommVault are already enabling this service today with customer examples.
SYS-CON Events announced today that Interface Masters Technologies, provider of leading network visibility and monitoring solutions, will exhibit at the 17th International CloudExpo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Interface Masters Technologies is a leading provider of high speed networking solutions focused on Gigabit, 10 Gigabit, 40 Gigabit and 100 Gigabit Ethernet network access and connectivity products. For over 20 ye...
Docker is hot. However, as Docker container use spreads into more mature production pipelines, there can be issues about control of Docker images to ensure they are production-ready. Is a promotion-based model appropriate to control and track the flow of Docker images from development to production? In his session at DevOps Summit, Fred Simon, Co-founder and Chief Architect of JFrog, will demonstrate how to implement a promotion model for Docker images using a binary repository, and then show h...
Cloud computing delivers on-demand resources that provide businesses with flexibility and cost-savings. The challenge in moving workloads to the cloud has been the cost and complexity of ensuring the initial and ongoing security and regulatory (PCI, HIPAA, FFIEC) compliance across private and public clouds. Manual security compliance is slow, prone to human error, and represents over 50% of the cost of managing cloud applications. Determining how to automate cloud security compliance is critical...
SYS-CON Events announced today that VividCortex, the monitoring solution for the modern data system, will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. The database is the heart of most applications, but it’s also the part that’s hardest to scale, monitor, and optimize even as it’s growing 50% year over year. VividCortex is the first unified suite of database monitoring tools specifically desi...
As enterprises capture more and more data of all types – structured, semi-structured, and unstructured – data discovery requirements for business intelligence (BI), Big Data, and predictive analytics initiatives grow more complex. A company’s ability to become data-driven and compete on analytics depends on the speed with which it can provision their analytics applications with all relevant information. The task of finding data has traditionally resided with IT, but now organizations increasingl...
Culture is the most important ingredient of DevOps. The challenge for most organizations is defining and communicating a vision of beneficial DevOps culture for their organizations, and then facilitating the changes needed to achieve that. Often this comes down to an ability to provide true leadership. As a CIO, are your direct reports IT managers or are they IT leaders? The hard truth is that many IT managers have risen through the ranks based on their technical skills, not their leadership ab...
Interested in leveraging automation technologies and a cloud architecture to make developers more productive? Learn how PaaS can benefit your organization to help you streamline your application development, allow you to use existing infrastructure and improve operational efficiencies. Begin charting your path to PaaS with OpenShift Enterprise.
SYS-CON Events announced today that Harbinger Systems will exhibit at SYS-CON's 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Harbinger Systems is a global company providing software technology services. Since 1990, Harbinger has developed a strong customer base worldwide. Its customers include software product companies ranging from hi-tech start-ups in Silicon Valley to leading product companies in the US a...
Learn how IoT, cloud, social networks and last but not least, humans, can be integrated into a seamless integration of cooperative organisms both cybernetic and biological. This has been enabled by recent advances in IoT device capabilities, messaging frameworks, presence and collaboration services, where devices can share information and make independent and human assisted decisions based upon social status from other entities. In his session at @ThingsExpo, Michael Heydt, founder of Seamless...
SYS-CON Events announced today that Machkey International Company will exhibit at the 17th International Cloud Expo®, which will take place on November 3–5, 2015, at the Santa Clara Convention Center in Santa Clara, CA. Machkey provides advanced connectivity solutions for just about everyone. Businesses or individuals, Machkey is dedicated to provide high-quality and cost-effective products to meet all your needs.