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June 6, 2022
There is a seasonality to farmland auctions and sales. It has always made sense to buy a farm in the fall or early winter so that the new owner had possession for the next crop year. Buying the farm after harvest was completed, under the seller's ownership, gave them clear title to the crop income for the current year. Also, it was clear that the new owner would have the income from the next year. Sales occurred other times of the year, but not nearly as many.
Today, sales of farms happen twelve months of the year. Activity slows down during planting season and summer, but auctions and private treaty listing sales now take place with more frequency in those months. For sales and ownership transfers that happen during the crop season, attention has to be given to division of income and expenses, division of rents, and how any current leases are handled by the seller, the buyer, and the tenant. The terms become a bit more complicated, but can be worked out with clear communication.
Farmland auction and sale activity during April and May was normal with a number of sales happening throughout the time period. Sale activity through mid-summer looks the same with auctions booked over the weeks to come. So far, this spring and summer bidding activity and competition at auctions continues to be aggressive with good land selling for as strong or even stronger prices than during the early spring time frame.
Auction and sale activity pick up again prior to and after harvest. It looks like the number of sales will be more normal compared to the elevated number of sales that happened during the last months of 2021, when potential tax law changes and the new higher land prices prompted more selling. Aside additional unknown events, the normal sellers will continue to be estates, trusts, and recent inheritors of farmland.
Senior Vice President - Real Estate Operations
|Category: Agricultural Real Estate News|