As interest rates hover near zero on bank savings plans and demand for productive land swells from producers and investors, business is booming in some areas for Auctioneers who sell ranch and farmland.
Larry Brenner of Farmland Auction & Realty, Hays, Kan., now conducts about one such auction each week and reports that the number of auctions he’s presiding over, as well as the dollar amount he’s bringing in, have increased considerably over the past two years.
“Appraisals keep getting higher,” he says, and that’s good for sellers and buyers. “It makes their equity position look better.”
The market is so hot around Charlotte, Iowa, though, that William Hamilton, CAI, of Hamilton Auctions and Farm Management, says properties that once may have gone to auction now are being snapped up by neighbors for expansion. His business remains steady at three to five such auctions a year.
In Yukon, Okla., Eddie Haynes, CAI, AARE, of Eddie Haynes Inc., says he conducts about a dozen land auctions a year.
Agricultural land has been holding its value, he says, but with a worsening drought in Oklahoma, many owners want to sell. The more property that becomes available, the less money it brings in and the harder it is to sell.
The capital gains situation has created a seller’s market, says Brenner, who also is a broker associate.
“If (buyers) get a 2-3% return on their land investment, they’re doing better than they can at a bank,” he says.
Brenner tries to reach investors and producers by advertising in newspapers in Kansas and in five surrounding states. He also uses the Internet, radio and TV.
On auction day, he conducts a live Internet auction.
With a little help from Geographic Information Services Inc., he puts together a brochure that lists exact land locations and includes aerial photos and soil surveys that indicate the soil type and productivity.