Land Prices: August 2019

I have been traveling around Missouri the last several weeks and have seen a lot of crop acres not planted, some crops not looking very good and some that look pretty darn good. I have also been reading a lot of articles on the current farm economy which include prices and tariffs.

My grandmother inherited her 240+/- acre farm easily over 100 years ago and I could not even begin to think of what her dad paid for it. She was orphaned at 2 and she kept the farm in tact thru depression, wars and everything else that could be brought on. She was a tough woman and not many people dare cross her and loyalty to her faith, her family, her farm and her country. We all were amazed how someone could go to church every Sunday and be capable of threatening someone that crossed her. It had to be her past and how she survived. Everyone new that she would kill if anyone threatened any of these loves. I remember driving around country roads when I was a kid looking at farms with Grandma and Dad probably in the 1960s and maybe 70’s and you could buy the best farms for $325+/- per acre and they kept passing because they thought the prices were ridiculous.

Well fast forward I bought my first farm in 1981 with a small farmers loan from FHA. It was a 654 acre farm and I paid $500 per acre. It was a big purchase back then and especially for a newly married young couple with a baby. Well everyone told me that I was the smartest person in the world and I was on the way to becoming rich. Then our president started to mess around with Russia and embargos then interest rates went to 20% and then in 1985 my farm was worth or valued by FHA at $50 or maybe $100 per acre. Talk about stress and being helpless.

The government did come up with many plans, no free money just money put on the back end of your loans with interest. They also came up with a program called CRP or conservation reserve program which took marginal land out of production and paid cash to the farmer for idling his ground. This was to cut down on the soil erosion which was caused by everyone farming every inch of their ground when the times were good and to keep the small towns in business. The problem is that the people in the city heard about this and they ended up buying all the CRP contracts which included the ground. The farmers were left high and dry with no land to farm and the towns did eventually die. It is called staying power.

Well again fast forward and there are so many of the same problems today as was back then just different numbers. The farmers I talk to today are in a very tight cash flow position. The expenses are out of sight and China which took years to build as our main buyer has been kicked to the corner. These markets took years to build. I remember vividly the soybean association and their push to get China to purchase our ag products and the cattle mans “Where is the Beef” promotions. It is the same story as in the 1980’s.

The farmers have been buying most of the farm land and it will be interesting to see if history will repeats itself as most times it does. Will it be as bad as in the 1980’s no one knows but anything that goes up as fast as the land market went up surely will get tested again and their will be land corrections and their will be buyers who sat on the sidelines waiting for this correction. It will take years to get back our markets and the government cant bail everyone out with new programs or cash. I had an auctioneer tell me one time that people go to auctioneers to sell because they don’t want to miss the highs and they will go back to the realtors because they don’t want the lows. We as a realtor have started to get very busy.

Family & The Roots of Country Life

I spent more than thirteen years raising my four kids and farming the land in northern Missouri.

Technically, I grew up in St. Louis but if you ask me where I feel like I did the most growing and spent the

most informative time in my life, I would say most of those moments were in the country, on the farm,

and on the land that had been in my family for over a century. It’s a part of who I am, who my family

was and who my family is and hopefully will be. It’s in the country, in the land, in the small town values

that we have our roots and where our roots and values remain.

As my kids get older and have kids of their own, I find myself reflecting and looking back. I loved my kids

and am proud of all of them: an attorney, a kindergarten teacher, a financial analyst, and one in

marketing and sales. My kids have great careers and are good people. My grandkids however, my

grandkids are perfect. My grandkids are the most perfect thing there is or will ever be in this world. Do

you think I am proud of them.

I look back and I think about my grandkids and what it used to mean to be a family and to be a kid. I

think about the times when kids could be kids, when children could jump on their bikes and explore with

the only admonishment that they be home in time for dinner. I think of the days when kids could spend

the night camping outside in the great outdoors. I think about the time before cell phones, computers,

television and twenty-four seven news stations. I think about the way I grew up, the way my children

grew up and I think about my grandchildren and what their lives will look like.

We moved to St. Louis when my oldest was eleven. Life is funny because she was the one who was

always the most excited to move to the city, to get out of the small town. At the ripe old age of thirty-

seven years, as a wife and mother, she now looks back to the time spent on the farm, growing up in

Kirksville as the most important years of her life and those she wouldn’t change for anything. Taking her

daughter to the farms to be able to run around in the country is just as important to her as it is to all of

my kids. Those are still some of our greatest times together.

Family is everything and the most important thing in life. However, these days there are so many

demands on people, so many distractions that take away from quality family time. The world my

grandkids are being raised in is not the same one I was raised in or even the same one that my children

were raised in.

Kids cannot jump on their bikes free to explore anymore – it’s too dangerous. Most kids now come from

families where both parents work and so family time is limited. That family time is further infringed

upon by cell phones, televisions, sports activities, social media, it all takes away from time and that’s the

one thing you cannot get back. Time goes so quickly.

My kids will still take refuge as so many should in the country. Out in the great outdoors, away from the

computers, and the televisions, the sports activities, social media, and the dangerous world we seem to

live in now, children can be children and families can be families. It’s only in the country, on the land,

walking through the fields or the forest that one feels truly at peace, that time seems to slow and when

can really truly breathe and feel alive. What a precious, amazing, priceless commodity.

I look forward to the days when my grandkids, like my children before them, and my siblings before me,

can run through the woods with abandon playing capture the flag, or tear through the fields on a four-

wheeler, fish in the lake or jump from the canoe on a hot summer day. I look forward to the day when

they are old enough to hunt with their grandfather, “Pop”, and to see the beauty of the cycle of life

when they see a calf born as another one dies. For now, it is enough to spend that time with my children

hunting and fishing and walking through the woods with my grandkids as they scream when they see a

squirrel or run with only the complete innocent abandon a young child can to grab an osage orange.

People say that life is not the same as it used to be and that children don’t have the chance to be

children any more. They don’t, not in the city. Out in the country, in the woods, on the land, children can

be children the way they were meant to be, the way we were, the way our grandparents were and

families can connect and build memories that last generations.

WATER

It is vital for all known forms of life, even though it provides no calories or organic nutrients. Water covers 71% of the Earth’s surface, mostly in seas and oceans. Small portions of water occur as groundwater, in the glaciers and the ice caps of Antarctica and Greenland, and in the air as vapor, clouds, and precipitation. Approximately 70% of the freshwater used by humans goes to Agriculture. Why am I telling you this and people are always asking me why I am obsessed with water. It is because it is rare, taken granted for, polluted and thought by many as a unlimited commodity. It is not an unlimited resource and that is why whenever I get a farm/ranch listing with water I make a big deal out of and it is priced higher than non water ground. Boone Pickens has said that the last major fight on this earth will be over water. This last Tuesday’s (12-10-2018) WSJ had a fabulous article on water and how Harvard’s endowment fund has purchased thousands of acres in California at above prices. They then drilled deep-water drills and began planting vineyards. They were willing to pay a premium for land that had good access to groundwater. With the earth’s warming it is making the resource that much more valuable. Harvard likes the natural-resources asset class “because we believe its physical products are going to be in increasing demand in the global economy over the coming decades.” In a warming planet, few resources will be more affected than water, as more-frequent droughts, storms and change in evaporation alter a flow critical for drinking, farming and industry. When grapes are harvested, about 75% of their weight is water. Owning vineyards effectively turns water into revenue.

In summary I am constantly telling my clients and investors to look for water on property and be willing to pay the extra cost and to be happy for you and your children and your children’s children that they will have access to water. It is worth the extra cost and clean water also offers so many recreational activities. Look at my web site for some of these properties. One just listed is the River Dream property which has about 1/3 mile on the crystal clear Meramec River near Steelville. This is the type of property to look at as is the Eagle Pines Equestrian Ranch near Lonedell that has a beautiful 20+/- acre lake on it or our 2,000+/- acre Mineral Fork River Ranch with a mile +/- of frontage on the crystal clear flowing Mineral Fork River. Call or write with questions or to visit. My next blog will be on the government and water rights. All very interesting.

Recent Land Thought

I was calling my very good friend yesterday to wish him a happy birthday. He used to run the Farm Service Agency or when I was farming the ASCS or the Agricultural Stabilization Conservation Service. The office is probably the biggest bank in the country but would never admit it. They are responsible for all the farm programs, crop insurance, reporting, etc. etc. They are a gigantic government program service that basically keeps a lot of farmers in business. Yes, I was a major participant. Anyway, we were talking and when I was farming in the 1980's they were very very difficult years even for farmers who were a lot better farmers and ranchers than me. We were dealing with 15% +/- interest, low commodity prices with no market, depressed land prices, just a total bad time to be a farmer. Well, I had to sell a farm to raise cash to stay in business and I have always felt bad since and I asked him when I was trying to figure out which farm to sell and he told me and said if you wait long enough you will probably be able to buy it for half what you sold it for. In our conversation yesterday I asked him again about this and he not only agreed with what he said but mentioned that maybe I could buy it back one of these days for a quarter of what I sold it for. These major farmers today have got a ton of debt, crop and livestock inputs are sky high and the interest is going to start to rise, the technology and science is there to increase yields and we are like the 80's scaring our foreign markets. Just a thought and maybe I should start to get serious about saving money for the next land buying opportunity.

No Till Farming and the Land Ethic II

In 1978 I was one of the very first in N. MO to implement the use of No Till Farming. Today it is the most common way to farm. Basically it is to plant your seed with little or no damage or disruption to the soil such as plowing or disking. As I was talking to an older farmer the other day he explained that I was probably 5 years to early as the large implement companies and chemical companies had not developed to full use their necessary inputs for no till to work. The following article which I found in one of my grandmothers books  is so necessary reading in today's over used world. As one of my friends said to me the problem with today's world is no one knows what is enough. There is only so much of mother earth. The following are from pages of a book that I am currently reading written by Dr. Aldo Leopold called "A Sand County Almanac" A truly great book on conservation. I will in future blogs expand on other parts of the book. When there are rainy or blustery days it is fun to go thru my grandmothers old books. She was also quite a woman who inherited her farm from her father when she was orphaned at 14 years of age. To say she loved her farm is the understatement of all understatements. She was also quite the conservationist in her own right and her notes and books during the war and the war effort pertaining to farming is just very good reading. I hope to share all this with you in the upcoming blogs. Basically everyone says write a blog and you sit and think of what and when you start you cant stop. But I am going to make it a ritual for who ever reads and for me to remember so many good times. Thank you and we will get on with the purpose of this essay.

Every great and lasting civilization in recorded history has been built on this layer of topsoil; often in the valleys of great rivers and in climates slightly warmer than temperate.  Each of the civilizations has lasted as longs as its soil fertility was maintained and has fallen when this fertility was depleted. Other minor causes may enter into such depletion, yet the primary cause has always been soil erosion, whether by wind or water. 

When erosion has exhausted the topsoil layer or washed it away , theirs is no amount of modern fertilizer which will maintain its productivity or life carrying capacity.  Only through  geological time, through the slow weathering of its basic mineral elements and the long, slow evolution or invasion of new plant and animal species which live and die on the land, can its life-supporting fertility be restored.

Thus we will do well to think of our land in more than economic terms-and to consider what course of action toward it is esthetically and ethically right.   Only thus can we preserve its stability and integrity - which is to say, its capacity for the sustained support of such higher life forms as mankind. 

Real Estate the Right Way

On my recent travels I was so impressed with the service that I received from a variety of people. The trip to the south got me thinking about what makes a quality business.... of course service but what kind of service? Service with a personal touch, caring, attentive, light hearted and most of all fun.  In my business of real estate it is a tremendous investment.  It should be done in a caring, attentive and yet fun environment. Yet I was also impressed with the knowledge of the staff for which I had contact with.  They knew their product and they were enthusiastic about what they were selling.... they knew all about what they were selling and explained with great detail.  

Real estate companies and agents have the same tools....or do they?  Do they have the knowledge that is needed to satisfy the buyer, do they have the attention to detail and do they have the enhusiasm for what they are selling to finish the job???? I know one thing Bailey Properties does! Interview others and see for yourself.

Land Ethic

I found this article taped into one of my grandmother's favorite books written by Aldo Leopold and titled A Sand Country. My grandmother was quite a bit of a conservationist before it was popular and who owned and kept her family farm thru many obstacles including two world wars, the depression and many other hard to believe events. She was a tough lady which I think most ladies of the time were. They were a totally different tough than the modern woman. They could survive and make do; there was no one else to blame, there was no help available and you took care of yourself and your family. Church was a big part of Grandmas life style which was to survive and be independent. She was very good with a switch and a "scatter" gun. She was orphaned at a very early age and her father gave her this farm in N. MO which she dearly loved. She loved the land and I am sure she was a big influence in my life. So here is the article written by Leonard Hall from 1950 and it is quoted directly from the newspaper article taped to her book.

Land managers, of both tame and wild lands, suffer most from the outworn concept that land is a personal commodity to be exploited at will.  And in the end, true conservation is impossible without the development of a "land ethic" now almost non-existent. Man must learn that he is not the conqueror of the land community, but merely a citizen of it.  How can he do this, when even his teachers have not yet learned what "land" is? It is the sum total of soil, water, air, sun and all the wild or domestic fauna and flora found within a given land community.

It is energy flowing upward through the land pyramid; with sun as the motive force, soil and water ads the base, and plants and animals as the complex ascending layers.  When we have learned what land is, says Leopold, and have developed a cooperative and ethical attitude toward it, Conservation will become possible, but hardly before this.

Sixty Six years after the above was written I read articles on the miracles of bees their lost habitat and the incredible good works that worms are always doing and how economists are predicting that the next wars will be about clean water I am shocked. We really have not come that far. I tell clients to buy dirt and especially land with clean water.

Land Parceling

I have been in the farming and ranching business for nearly my entire life and in the farm and land sales business for close to 35 years. Often times when  I am called to look/ list a clients property I am almost always shocked by how they have parceled the land up. They have a beautiful piece of land and usually with a unique selling piece that would make the rest of the farm really worth something. For what ever the reason; money, neighbors, a pushy previous real estate agent that wants a fast sale they have carved out often times the piece that brings the most value to the total property sale. Which brings me to the reason for this blog, land can be parceled off  and sold, I understand that money talks, so do fast talking neighbors or real estate agents looking for a quick sale  but please before you parcel off contact a reputable land broker. In the end you will be so happy that you got the advice you needed to bring the most value to the acreage you have left. Neighbors can be great but times change and people pass on and land changes hands, it upsets me to see properties carved up for a quick sale ... only for the rest of the property to be devalued because it was not parceled off correctly and/or the property is much more difficult to sell because of the way it was parceled off. So before you parcel seek the advice of a land specialist, it can be quick and definitely worth your financial pay off.

 

 

 

 

 

LAND AUCTIONS

I have been asked several times in the last couple of weeks about land auctions and what might make an owner consider to go this route in selling his or her land. It is important to note that I have been responsible for selling thousands of acres of land by the auction method and have a very close working relationship with two of what I consider to be the best auction houses in the state of Missouri.

Land auctions main attraction is that it is a fast way to liquidate you holdings and sometimes you can maximize your profit. There are internet and live auctions, there are reserves; where the owner sets a base and no reserves where the land sells regardless of price. With land auctions the buyer or bidder comes prepared to own the land; there are no contingincies for inspections or financing. The buyer is expected to have done all is homework.

I am very partial to the live auction method which means that everyone is gathered in one room and sometimes there is bidding from the phone and the auctioneer chants the prices. Most large parcels of land will be divided up into smaller pieces which will ultimately enable more buyers to purchase. Sometimes this will bring a higher price for the whole farm. The live auction will bring a competitive spark to the bidding and a good auctioneer will be able to see and feel the emotions and get an even higher price from the bidders. With the internet auctions I have never felt the need or competition to drive a higher price and there is just to much that goes on behind the scene. I also like the no reserve auctions as this will bring out the real buyers knowing that this land will sell today. They will travel and they will show up to bid and prepared to buy. With a reserve price if you no sale a farm then you are stuck with an auction appraised value of the farm. People dont forget what the last offer was. Also, another problem I have is that with auctions no matter how big the turn out is there are usually just two bidders and there is always the chance that one might be in the restroom and not bidding.

As I previously mentined I have been responsible for large land and machinery auctions for estates, banks, trust companies, attorneys and families all with the need to settle and cash in the land quickly. Many financial institutions do not want land in their portfolio as it is much harder to manage than cash.  Whether you decide to list or auction my recommendation is to talk with someone you trust that has had experience with all forms of land sales and let them outline for you both ways. Both auctions and listings have a place.  With over 30 years of selling country property I would be happy to work with you in helping you get to your ultimate goal either by auction or listing process. 

WATER

When I put my first crop in ground it was 1978 and farming was no where it is today. We were some of the first people in N. MO to go total no till farming. It was quite a sight and there was quite a commotion with the neighbors. We did not have Roundup and we mostly sprayed with Paraquat or what many people said was a form of agent orange. Anyway long story short is that there was always an article on the average acre of N.MO farm land lost due to erosion was 3+/- tons of soil per acre with conventional farming. With that said there has been a gigantic rush with all the government agencies to somehow control the soil and ultimately the quality of water.  We are so very lucky to live in the state of Missouri as we are blessed with an abundance of water. I cannot begin to tell you how many times we have showed farms and cattle ranches to out of state buyers who come to MO for the water. I have been preaching on and on about the increasing value and importance of clean water and am I very proud of the listings that I have that are highlighted by springs, running creeks, rivers or just good clean abundant ponds.  There have been many smart people who have said the last fight on earth will be over water. What ever you think I will say that water is becoming the new commodity that will forever be in the news. Just look out west and you will appreciate what we have here in the Midwest. We are so lucky to have this abundant clean water and land prices that have yet to reflect the shortage. Yes, we need to take care of it and keep it clean and NO we do not need any government agency to tell us how to take care of it on our private land.  I think that todays farmers and land owners are well qualified and smart enough to realize that they need to protect all the God given resources that have been given to them and you can see that most farmers do no till farming or at least minimum tillage to protect all their resources.

A little of my history and thoughts on land buying

Yes this is my first attempt to blog and who knows. I have already by accident erased my first copy which I thought was pretty good so who knows if I am cut out to get this done? Anyway I will try again:

I have had an interest in land ownership and farming since I was to little to remember. Farming and cattle has always been in my families blood and my grandmothers farm has been in our family for over 90+ years. I bought my first farm in the early 1980's and was also just  married. I paid $500 per acre for 640 acres and got my down payment thru the beginning farmers program at the FHA. The supervisor and I wore down many pencil eraser's trying to figure out on paper how to make payments with 60 cent cattle and $1.40 corn. I don't think we ever did figure it out but in a years time the farm went from $500 per acre to $100 per acre and you couldn't even beg someone to buy it and this was right after the great farming years of the 1970's. Anyway long story is the government came out with a program called CRP, which is a total separate blog and  I somehow kept the farm and the question is when they were telling me how smart I was when I bought this farm in the 80's what are they telling the land buyers now? There is no way or barely anyway that the farmers can afford to pay the current rents and land payments at these crop prices. The good years in the cattle business will slowly go away and then what will happen to the land prices? I often hear the line from the famous, Will Rogers that "they aint making it anymore" but every time a farmer dies the land becomes available and with taxes and prices and family and the avg age of todays farmer  it is going to become more available and probably cheaper. I am still a big believer in land and would never do without but it is partly because of my love of independence and freedom that it brings and especially in todays world this counts for a lot.