Industry Insights Blogs

In 2021 the U.S. rejoined The Paris Agreement, a legally binding international treaty on climate change, and published “The Long-Term Strategy of the United States, Pathways to Net-Zero Greenhouse Gas Emissions by 2050 [1]. Net zero refers to a balance between the amount of greenhouse gas (GHG) that is produced and the amount of GHG removed from the atmosphere. Agriculture accounts for approximately 10% of total GHG emissions in the U.S. [2].

The appraisal team at Peoples Company was able to track 82 tracts or 6,803.16 acres sold at public auction in Iowa during March 2024. The average dollar per acre was $11,316, the average dollar per tillable acre was $13,574, and the average dollar per CSR2 was $174.

In this first webinar in the Landowner Insights series, Dr. David Muth of Peoples Company presented on market trends, economic drivers, and environmental policy impacting the farmland asset class as well as management strategies to regulate risk and optimize return.

The appraisal team at Peoples Company was able to track 85 tracts or 7,064.51 acres sold at public auction in Iowa during February 2024. The average dollar per acre was $13,389, the average dollar per tillable acre was $14,935, and the average dollar per CSR2 was $185.

The appraisal team at Peoples Company was able to track 40 tracts or 3,868.91 acres sold at public auction in Iowa during January 2024. The average dollar per acre was $12,060, the average dollar per tillable acre was $14,071, and the average dollar per CSR2 was $183.

Peoples Company tracks agricultural auctions across the state of Iowa. From this data, we calculate the average dollar per CSR2 point ($/CSR2) for sales of tracts with greater than 85% tillable land. Additionally, these tracts are largely unimproved or include minimal improvement contribution.

The appraisal team at Peoples Company was able to track 94 tracts or 9,929.61 acres sold at public auction in Iowa during December 2023. The average dollar per acre was $12,104, the average dollar per tillable acre was $14,085, and the average dollar per CSR2 was $180.

Beginning January 1, 2024, the Corporate Transparency Act (“CTA”) will officially go into effect, which requires additional reporting obligations on U.S. entities and foreign entities doing business in the United States to provide beneficial ownership information to the Treasury Department’s Financial Crimes Enforcement Network (“FinCEN”). Congress established that the general intent of the CTA is to prevent illicit activities, including money laundering, financing terrorism, tax fraud, and other harmful activities related to national security interests, from occurring through the use of entity schemes. The CTA applies to any corporation, limited liability company, or other similar entity (limited partnership; limited liability partnership; limited liability limited partnership) that files an application (e.g., Certificate of Organization/Incorporation filed with the Secretary of State) under the laws of a State or Indian tribe, subject to certain exemptions. As a result, the CTA will impose the reporting burden on many farmers, landowners, and other industry professionals.

After reading yet another negative headline on the $20 trillion commercial real estate (CRE) market, I was reminded of the investment characteristic I once assumed the CRE market shared with the $4 trillion farmland market.

The appraisal team at Peoples Company was able to track 255 tracts or 23,230 acres sold at public auction in Iowa during November 2023. The average dollar per acre was $12,018, the average dollar per tillable acre was $14,124, and the average dollar per CSR2 was $181.