Farmland Fetched Record Price
Wednesday, March 08, 2006
Farmland fetches record price
By Chris Anderson canderson@pantagraph.com
BLOOMINGTON - More than 820 acres of Central Illinois' best farmland near Danvers sold Tuesday at auction for a new area high price of $6,000 per acre. 
The nearly $5 million sale attracted more than 65 bidders. A Northern Illinois family with farming interests purchased the entire acreage as part of a 1031 tax exchange. Under a 1031, land sellers may buy similar land to reduce capital gains taxes.
"This is one of the strongest auctions we've seen," said Brian Thompson, Soy Capital Ag Services Bloomington vice president. "It sold in the top end of the trading range for Class A (the most productive) soils. There is a good supply of Class A land that typically sells for $4,100 to $6,000 per acre depending on size, location and quality.
"The property, located at Illinois 9 West and Illinois 122 near Danvers, prompted keen interest because of its uniqueness - more than 800 contiguous acres. The land had been held in the Louise Empson Trust, with Commerce Trust as the trustee. Soy Capital managed the land and the sale.
The acreage was offered in six tracts. While the average price for the farmland and buildings was $6,000 an acre, the average price paid for the farmland was $5,932 per acre.
"We will probably continue seeing land sell within this trading range," said Thompson. "There is more interest now in farmland than last fall. Farmer interest is the underlying support. And a lot of the 1031s have farming backgrounds.
"The prediction mirrors findings from a mid-year survey by the Illinois Society of Professional Farm Managers and Rural Appraisers.
Survey manager Dale Aupperle of Heartland Ag Group Ltd. in Maroa noted farmland values would continue increasing with no end in sight.Survey findings in September showed prime farmland in Central and Northern Illinois often topping $5,000 per acre. About 56 percent of buyers used 1031 tax exchanges. A University of Illinois study showed 1031 exchanges add at least $350 to $400 per acre to farmland prices.
The nearly $5 million sale attracted more than 65 bidders. A Northern Illinois family with farming interests purchased the entire acreage as part of a 1031 tax exchange. Under a 1031, land sellers may buy similar land to reduce capital gains taxes.
"This is one of the strongest auctions we've seen," said Brian Thompson, Soy Capital Ag Services Bloomington vice president. "It sold in the top end of the trading range for Class A (the most productive) soils. There is a good supply of Class A land that typically sells for $4,100 to $6,000 per acre depending on size, location and quality.
"The property, located at Illinois 9 West and Illinois 122 near Danvers, prompted keen interest because of its uniqueness - more than 800 contiguous acres. The land had been held in the Louise Empson Trust, with Commerce Trust as the trustee. Soy Capital managed the land and the sale.
The acreage was offered in six tracts. While the average price for the farmland and buildings was $6,000 an acre, the average price paid for the farmland was $5,932 per acre.
"We will probably continue seeing land sell within this trading range," said Thompson. "There is more interest now in farmland than last fall. Farmer interest is the underlying support. And a lot of the 1031s have farming backgrounds.
"The prediction mirrors findings from a mid-year survey by the Illinois Society of Professional Farm Managers and Rural Appraisers.
Survey manager Dale Aupperle of Heartland Ag Group Ltd. in Maroa noted farmland values would continue increasing with no end in sight.Survey findings in September showed prime farmland in Central and Northern Illinois often topping $5,000 per acre. About 56 percent of buyers used 1031 tax exchanges. A University of Illinois study showed 1031 exchanges add at least $350 to $400 per acre to farmland prices.
posted by Brian J. Davis at
3/08/2006 01:01:00 PM
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