Farmland auction points to fears bubble will burst

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Around 80 people packed the room at the Kokomo Shrine Club Tuesday, some there to bid, others there, as Halderman Real Estate Services area representative John Miner said, “to get free appraisals on their land.” Citing USDA figures, Bloomberg reported farmland values nationwide have increased by 72 percent over the last three years, leaving farmers concerned about a bubble market. Farmland could lose 30 percent of its value in the next three years as the corn rush ends, Gary Ash, chief executive officer for 1st Farm Credit Services in Normal, Ill., told Bloomberg recently. “[…] we’re not seeing much of a decline in anything,” Miner said. The auction property, listed as the Ammerman-Harris property, had been in the same family for generations, but both the Spanglers and the Wingers thought it hadn’t been farmed by anyone in that family since Don Winger and Charles Spangler, now both in their 80s, were young men. Farmers pay close attention to soil quality and yields and auction houses like the Wabash-based Haldermans usually list the specific types of soils geologists have recorded on the particular property. For at least the past year, tillable acres with good soil quality in the Corn Belt have been going for more than $10,000 an acre. After bids for the whole farm reached $1.4 million, the auctioneers took a five-minute break, just to give the remaining interested parties time to confer. When the bidding resumed, heads in the room swiveled back and forth, like a tennis match, as the Spanglers and the Wingers tried to decide what to do. Farmers haven’t forgotten the collapse in farm land values in the early 1980s, and neither family knew how high the other was prepared to go. […] Brad Winger didn’t use the word “bargain,” but said he thought the same parcel would have averaged $11,000 an acre last year.

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