Competitive bidding by farmers pushes land prices
Three Oklahoma properties sold at auction last week at prices that caught the attention of area bankers and landowners, according to Schrader Real Estate and Auction Company, which conducted all three of the auctions.
Each of the properties was purchased by neighboring landowners, and this reinforces the fact that farmer competition for land continues to be a main driver for increasing farmland prices.
“All three of these auctions amounted to an object lesson in the power of competitive bidding. In each case, the property sold to a neighbor, but because the neighbor had competition, the prices were considerably higher than some people had expected,” said Brent Wellings, Southwest manager for the auction company.
In the first auction, approximately 550 acres of mostly tillable bottomland sold for $2.366 million, or $4,301 per acre, as the bidding came down to an immediate neighbor and another bidder from nearby with operations in the area.
Wellings suggests that land auctions where neighbors bid against each other is still a good way to earn the highest dollar for farmland.
“We had feedback from bankers and appraisers that they had not anticipated a price in this range. Could the land have sold without an auction? Probably. Would it have brought this price? Probably not,” said Wellings.
Auctions of the two other properties—170 acres in Grady County and 74 acres of recreational land in Canadian County—brought similar results.
“The Grady County acreage, which was a mix of tillable and recreational land, sold for $343,200, and the Canadian County land brought $222,450. All of our feedback from others in the area suggested that these prices were on the top end of the market range,” said Wellings.
Farmland continues to come up for sale, but maybe not as much as farmers who want to expand would like to see. There always seems to be local farmers who are interested in making bids, often higher than expected.
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