Farmland 101: Undergrad buys 80 acres for $1.13 million

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Sale Nineteen-year-old Cody Staudt may be too young to legally gamble or drink alcohol, but this ambitious Iowa State University undergraduate didn’t let his youth stop him from a smart investment opportunity.

That investing came to the tune of $1.13 million for 80 acres of farmland near Rockwell, Iowa.

“It’s a good investment,” Staudt said.

According to a report by the Mason City Globe Gazette, Staudt was one of nearly 100 people who turned out to bid on the northern Iowa farm. The farm sold for more than $14,000 per acre, and for Staudt, who had previously rented farmland while completing his ag studies, the cost is on-par with his expectations.

“It’s a good piece of land,” said Cody Staudt, who purchased the farm located northeast of Rockwell. “It brought what I thought it would.

Read, “$1.13 million for 80 acres; farmland prices continue to climb.”

Farmland values in Iowa and across the country have jumped significantly over the past several years. Recently, a farm in Illinois sold for $15,000 per acre, and similar results have been reported in other ag states.  

The Federal Reserve Bank of Chicago reports that “farmland values in Iowa and parts of Indiana, Michigan, Wisconsin and Illinois were up 16 percent since early 2012,  the third largest increase since the late 1970s.”Click here to read more.

Farmland values in the nation’s midsection are used by federal economists as a gauge for farm economy and to determine the health of the banking system. But are they a good investment?

Michael Duffy, Iowa State University Extension economist, recently wrote an article to provide his latest analysis of which is a better investment -- the stock market or farmland.

“Land’s performance relative to the stock market over the past few years has been spectacular,” Duffy wrote. “Will this trend continue? Time will tell. Which is the better investment? As the old saying goes, timing is everything in the success of a rain dance.”

Read more.



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Brian    
VA  |  April, 10, 2013 at 03:37 PM

Is that really a "smart investment opportunity"?

PJ    
Iowa  |  April, 11, 2013 at 08:51 AM

Time will tell. Compared to interest on a CD anything is better. Some buyers are close to paying cash for adjoining acres. But I also remember a farmer years ago who sold 320 acres on contract for $2500/acre. He got it back two years later when the value had dropped to $1,300. I guess you should sell for cash.

jace    
wi  |  April, 11, 2013 at 09:00 AM

I don't remember having that kind of money when I was a college student. Do you think Daddy had something to do with the financing???!!!!

Mark    
IL  |  April, 11, 2013 at 09:36 AM

My banker wants to loan no more than the 5 year appraisal . Today that is $5500, Effingham co. IL ground just sold for $10,000 to $14,500 an acre. So I need to come up with $4,500 to $9,000 an acre cash. Buy the way, my neighbor had the farm give to him. He can afford to buy ground. (no land payments for 35 years) Us on the other hand bought our ground for $2750 / ac in 1982. (almost went bankrupt in 1986) then could have purchased another 100 acres for $1250 / ac in 1986. ( passed it up because thinking I should file bankruptcy) Figuring very good yields, no machinery expense. Top grain prices, No fertilizer expense,(have more manure than I should have, but not going to give it away) it would take 50+ years to pay off the ground. Things will come around. Always does. We need $3.00 corn

buckeyeboy    
ohio  |  April, 11, 2013 at 09:51 PM

Moron!

buckeyeboy    
ohio  |  April, 11, 2013 at 09:53 PM

Way to go MORON!

Brian    
VA  |  April, 12, 2013 at 12:30 PM

He is young enough that hopefully he doesn't have too much to lose beyond the seven years in bankruptcy if he can't sell corn for $600/bushel.

Dano    
US & SA  |  April, 17, 2013 at 05:24 PM

Meanwhile I buy land in South America I can double crop with wheat and soy, comes close in some cases to what this kid spent, and I pay less than $5k/acre for it. Last year earned about 13% pre-tax return. I htink this year may be about 10%. And thats having it all custom farmed as well.

david park    
dougherty  |  June, 20, 2013 at 08:43 PM

Haters gonna hate and there was no help from daddy its called saving and being smart with ur money


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