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Gannon Real Estate Services

New Newsletter – Hot off the Presses –  Newsletter – October 2019

Gannon Real Estate & Consulting lists farms for Iowa landowners and helps buyers find farm land for sale. Agriculture expertise includes IRA real estate purchases and 1031 exchange programs as well as land brokerage & appraisals.

We offer a variety of services in Iowa, including:

  • Farm Real Estate Brokerage and Appraisals
  • Farm Land Listings
  • Farm Management Services

Our dedication is to the best attention to detail for our clients and the land we represent in sales and management. At GREC you get individual attention from Mark Gannon who has over 30 years experience in all aspects of farm real estate. Some examples are the founding of Farmland Stewardship Solutions, US Farm Records and 2004 Iowa Supreme Court Unanimous Decision related to the Powers farm controversy with ISU and the Iowa Board of Regents.

Fall 2019 Update

Leasing – The 2020 leasing season is around the corner and still lots of questions on 2019 yields and commodity prices plus what will 2020 bring. The best you can do is control what you can and be diligent that your land is set up as good as possible for high yields and thus good profits for the tenant and good rents for the owner. We use flexible cash rent leases and require good information to do so. Most owners that are managing on their own are severely lacking here and I hate to say it but most new account we get that have been cash rented are inadequate on fertility. The impact is unmistakable that these farms are not producing as well as they can be and the blame can be spread around and especially to the owners who are not overseeing their land as they should. We are doing our best to get our managed farms as good as they can be and the good operators buy into it since they know it is in their best interest. 

At a recent ISU Farm Leasing meeting on Friday Aug. 2 in Nevada the theme with Steve Johnson’s presentation was transparency with the operators giving good yield data for the farms they rent. He hammered the landowners also for not knowing and I think this is great. This plays right into what we are trying to set up and do at Gannon Real Estate and Farmland Stewardship Solutions. Steve has really ramped this theme up the last few years and I like it. He and I are good friends and have this conversation many times. He has been a believer in flex leases for a long time and believes you can’t do a flex lease without good yield data. He pointed out the opportunity to update farm yields at the FSA this fall and that many landowners will not know about it or follow up. These new yields will be based upon yields from 2013 to 2017 and require crop insurance reports or other evidence to update the yields. I still see FSA bases and yields on rented farms that have yields from 1984. If you didn’t prove your yields back then you got the county average of 122 bu/acre on corn and around 40 bu/acre on soybeans. Some are now closer to 200 and 60 bu/acre now and may be increased this fall also but many won’t because most landowners won’t follow up. Operators should do it but many won’t either but should. 

The fact is that leasing farmland is not easy and getting more complicated all the time. Many landowners are missing out on opportunities and their land is suffering and they don’t know it. I got another new soil test on a new farm management account. As I feared the lime, phosphorus and potassium were all low and now the new tenant has to build it up. He and the owner will be missing higher yields in the meantime due to the owner trusting the previous tenant who was there for many years and upset we had to make a change. Sometimes these are not easy choices but the best for the land, the owners and the operator. We can get you on the right track. 

Land Sales: My experience and the general thought is the good land in strong neighborhoods has held up well, the lesser CSR2 land or ones that are harder to farm have fallen 15% or so and the marginal land is dropping faster than the rest. The marginal land which includes CRP and lower CSR cropland is facing profit challenges more than any other segment. The CRP rates are going down and the maintenance requirements are going up. There are no more incentive payments or cost share on mid contract management. I doubt if we will enroll much CRP anymore so we hope the underlying land is worth farming or it will be back to pasture or hay. We have sold 1,500 acres this year and they range from $11,400 to $2,500/acre. There is more variation now than I have ever seen. The flight to quality has been going on for years but it is really ramping up now.

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