Uncover the Hidden Gems of Waterloo's Farm Auction
Sellers - A Family Legacy
In Waterloo, a 176-acre century farm changed hands at an auction on Oct. 29. The property was owned by sixteen family members, seven of whom were part of a trust under LaVerne Proctor. She passed away in December 2022, leaving behind this agricultural heritage. The remaining family members decided it was time to sell, marking the end of an era.
The trust and the family's connection to the land showcase the significance of this century farm. It represents not just acres of fertile soil but also the memories and stories of generations.
Buyers - Diverse Plans
The four buyers who acquired the land have distinct plans. Tract 1 buyer aims to build a home on the mostly tillable land with a scenic pond. Sold at $20,000 per acre for a total of $210,000, this tract holds the promise of a new residential development.
Tracts 2 and 3 were purchased by a private Christian school with plans to construct a new building. At $25,581 per acre for a total of about $550,000, this section of the property will serve a different purpose, adding educational value to the area.
Tracts 4 and 5 will continue to be farmed, with a buyer planning to maintain the agricultural operations. Sold at $21,121 per acre for a total of about $1.225 million, these acres will contribute to the local agricultural economy.
Tract 6 was purchased using a USDA Farm Service Agency (FSA) loan by a beginning farmer. Sold at $13,914 per acre for a total of about $1.198 million, this tract will be a new chapter in farming for the buyer.
Economic Analysis - Steady Trends
The sale of this property at about $3.18 million, averaging $18,075 per acre, is significantly higher than the 2024 state-wide average of $8,700 per acre. This indicates the unique value of this particular farm in Waterloo.
Brad and Brenda Chandler predicted the sale price within a few hundred dollars, showing their expertise in the market. Their recent sales in the same area confirm their hunch that farmland sales in the area are holding steady.
The Federal Reserve Bank of Chicago's November 2024 AgLetter also supports this trend. The seventh district, which includes Illinois, Iowa, Indiana, Michigan, and Wisconsin, had no year-over-year change in agricultural land values in the third quarter of 2024. This is the first period without an increase since the fourth quarter of 2019.
Data from the University of Illinois Farm Business Farm Management (FBFM) shows that 2024's average of $8,700 per acre is a 3.3% increase over 2023's average of $8,420. However, the increase has slowed compared to previous years due to factors such as rising interest rates and lower commodity prices.
Brad Zwilling, who compiled the data, explains that farmers' strong financial positions and record high incomes in 2021 and 2022 have supported land purchases. But with higher interest rates and lower returns, the trend is starting to slow.
About the Property - A Rural Gem
The land is located on the edge of Waterloo in Monroe County, directly east of the Waterloo Country Club. The county's plans to redirect a road along the farm's border will transform it into a dead-end public road, adding to the property's uniqueness.
The property is a mix of fertile, tillable cropland, picturesque views, and an older home. With taxes of $4,819.62 in 2023, it offers a balance of agricultural productivity and rural charm.
Each tract has its own characteristics. Tract 1 is mostly tillable with a scenic pond and an approved entry point. Tracts 2 and 3 are also tillable, while Tract 3 includes a farmstead and historic home. Tracts 4 and 5 have road frontage and established access. Tract 6 is mostly tillable with city limits on one side and a redirected road.
All acreage amounts are considered "more or less," adding to the charm and flexibility of this diverse property.
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.Dire Situation in Farm Country
Boozman highlighted the dire situation in farm country, especially for crop producers. Despite stronger livestock prices than expected, the combination of high production costs and lower commodity prices is taking a toll. Federal intervention is seen as crucial as bankers are reluctant to loan money for 2025 crops. 1: The USDA has forecast a 25% plunge in net farm income this year, but it still remains the fourth highest on record at $116 billion and 15% above the 10-year average. However, for individual producers, the situation is different. Hyde-Smith pointed out that with high costs and interest rates, 20% of good producers are expected to lose out. This is truly an emergency and a crisis for farmers. 2: As Congress makes hard choices about disaster funding and other economic assistance, it is essential to identify which farmers are struggling. USDA deputy secretary Xochitl Torres Small has spoken to farmers and understands their input cost-related challenges.Senator Boozman's Perspective
Boozman, who is set to become Senate Agriculture Committee chair, emphasized that even with higher-than-average farm income in the past, the current situation with high interest rates and costs is dire. He questioned how rural America can endure this without significant help. 1: The Kansas City Federal Reserve reported a more than 40% growth in the volume of new operating loans during the summer compared to the third quarter of 2023. But weak profit margins in the crop sector continue to weigh on the farm economy, while the cattle industry shows strength. Farm operating debt has grown rapidly alongside lower crop prices and high production costs, and lending activity for other types of loans has softened. 2: Interest rates on farm loans averaged slightly more than 8% during the third quarter before the Federal Reserve's rate cuts. Bankers in the central Plains reported a slight increase in the rate of problem loans during the same period, with about 6% of loan portfolios on the "watch list." In the Midwest, agricultural credit conditions weakened, with 42% of responding bankers predicting a lower volume of farm loan repayments over the next three to six months. Forced sales or liquidations of farm assets by financially distressed farmers are expected to rise.Brace for the Weather Shift - Thanksgiving and Beyond
Risk for Frigid Temps
According to the Climate Prediction Center (CPC), certain areas in the Northern Plains are at a high risk of experiencing temperatures dipping to -10° Fahrenheit, with even lower wind chill values. Livestock owners in these regions are advised to take proactive measures and closely monitor the weather forecast. Interestingly, colder air temperatures also have a positive side. They lower soil temperatures, which can be beneficial for effective nitrogen application. When the temperatures are sub-50° but still above freezing, it helps retain nitrogen in the field for the next spring.This contrast between the challenges posed by frigid temperatures and the potential benefits for agriculture showcases the complexity of weather patterns and their impact on different sectors.
Precipitation Outlook
Across the Midwest, especially in the Ohio Valley, there is an above-average chance of precipitation during the Thanksgiving week. This is due to a low pressure system taking hold. While this is good news for improving drought conditions in the Midwest and places with extreme drought like South Dakota and Ohio, it's a stark contrast to the dry conditions in October. In southern Illinois and Missouri, which were wet from heavy rains earlier in November, this shift from one extreme to the other is a pattern that has been noticed in the past couple of years.The varying precipitation levels across different regions highlight the need for careful monitoring and adaptation to changing weather conditions.
Thanksgiving Travel
The CPC has issued a 20%–40% chance of heavy snowfall in the Great Lakes region and Interior Northeast from Nov. 27 to Dec. 3. This poses potential issues for Thanksgiving travel, especially air travel. The American Automobile Association (AAA) predicts a record 80 million Americans will be on the move during the holiday. While it's difficult to predict with certainty, there is a possibility of snowfall in the upper Midwest during the Thanksgiving week.Staying updated on the shifting weather conditions is crucial for ensuring a safe and smooth travel experience during this holiday season.