From farmprogess.com:
In a remarkable turn of events, Missouri set a new benchmark in the farmland market this fall. A seemingly unremarkable 115 acres in Saline County, Mo., recently sold for an astonishing $34,800 per acre in late September, shattering the previous record held by Iowa at $30,000 per acre. This rapid sale, which concluded in a mere 15 minutes, was the result of a fierce bidding war between two farmers. The victor, Jeff Baxter from Carroll County, Mo., isn’t an investor but a neighboring farmer.
In August, an auction of 60 acres of Adams County, Ill., farmland brought $30,000 per acre with little fanfare.
The difference with that sale is that it was considered development ground. High prices on development ground are expected and not really newsworthy. What makes the Missouri sale stand out is that the reason for the demand for that piece of ground is not so obvious.
Photo by Holly Spangler
My farm management colleagues who were closer to the event don’t have much insight either. Some say it could have been 1031 exchange money; others think that perhaps ground nearer to the buyer was not as readily available. Only the buyer knows, for sure. From my perspective, it seems like a lot of money for dirt you gotta drive to.
What other reasons would drive someone to pay that much money for farmland? Here are five motivations that farm managers know can impact sales and push prices higher.