Farms under professional management

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Illinois farmland under management by members of the Illinois Society of Professional Farm managers and Rural Appraisers topped the 2 million mark in 2012, according to a “Profile of Services” survey done by that organization earlier this year.

“This survey shows that the 2,030,118 acres under management by Society members represents 7.6 percent of the 26,746,366 total farmland acres in the state reported by the USDA,” said Bruce Huber, AFM, ARA, Hickory Point Bank Ag Services, Decatur, Ill., and president of ISPFMRA. He says this is the first definitive survey taken of the industry in at least 20 years.

Huber says the survey was divided into two sections with one focusing on farm management and real estate services and the other on appraisal services. Only one survey form per company was submitted in an effort to reduce redundant responses.

“The total number of properties being managed by the members is 6,241 with an average of 32 farms per manager,” Huber explained. “The members reported that both the number of farms and acres under management increased by more than 13 percent since 2003. And they expect this trend to continue moving forward.”

He notes that the value of the farms managed in 2012 was put at $20.76 billion. Valuation on all agricultural land appraised by the members in 2012 was set at $5.06 billion.

“The total society membership consists of 259 members among 116 companies offering farm management and real estate or appraisal services,” Huber explained. “The survey was very broad brush and the results cover everything from the average number of farms managed by professional farm managers to the types of leases managed to the value of farmland appraised and sold by the firms during 2012.”

 

Highlights of the survey include:

 

Farm Management

Services offered by Farm Management Firms

 

Farm Management — 78%

Real Estate Services — 13.2%

Appraisal Services — 4.9%

Other — 3.4%

Total Properties Managed — 6,261

Average Number of Properties Per Manager — 32

Total Farmland Acres under Management — 2,030,118

2012 Value of Properties Managed — $20,760,743,000

ISPFMRA Members Designated as Accredited Managers — 80.1 %

 

Total Acres by Crop

Corn — 1,170,414

Soybeans — 788,298

Wheat — 31,682

Pasture — 17,403

Management Trends

Since 2003

Acres Managed Up 13.3%

# of Properties Up 13.6%

Tillage Practices on Acres Managed

Mulch Till (more than 30% residue) — 57.61 %

Conventional (less than 30% residue) — 38.76 %

No-Till — 19.23 %

Ridge Till — 4.3 %

Property Lease by Type

Crop Share — 48.44

Fixed Cash Rent — 29.11%

Real Estate Brokerage Services

Number of Properties Listed in 2012 — 728

Value on Properties Listed — $6,005,085,100

Variable Cash Rent — 20.38%

Custom Farming — 13.73%

Forecast for 2023

Acres Managed Up 17.4%

# of Properties Up 18.6%

Appraisal Services

Number of Companies Specializing in Appraisals — 27

Number of Appraisals Conducted — 1,717

Appraisals Contracted by:

Lenders — 36.6%

Estates — 28.5%

Valuation on All Properties Appraised in 2012 —

$7,506,871,400

Valuation on Agricultural Properties Appraised in 2012 —

$5,059,631,300

Rice — 5,800

Permanent Plantings — 4,330

Alfalfa — 2,346

Other 9,845

(CRP, timber, seed corn, etc)

 

The Society has prepared a complete summary of the survey and it is being made available through the organization’s Web site at www.ispfmra.org.

Information provided by the Illinois Society of Professional Farm Managers and Rural Appraisers.


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T Allen Dyer    
Iowa  |  November, 14, 2013 at 10:15 AM

Dear Readers: If you have an interest in farmland either as an active farmer or investor then you will want to follow our organization. We are the helping to changing the way farmland is bought, sold and valued. Over the last 6 years we have interviewed hundreds of older farmers and have developed, with our employer (a group of farmers and investors) a new paradigm which enables farmers to get the liquidity they are looking for without having to sell farmland, borrow or pay a big capital gains tax. No realtor commission or auction fees. For investors, our firm creates direct contacts with farmers looking for liquidity, allowing them to invest without managerial expense or responsibility. Investors get the opportunity to invest in farms that may never be offered for sale to investors as outright acquisitions. This is the way investors will invest in farmland moving forward. This model has the potential to open up a 2 trillion dollar inventory of family owned farmland to investors for the first time in a way that is attractive to farmers, ensures food security and provide other positive social benefits. This model is also addressing farmlands single greatest shortcoming—being illiquid, potentially pushing farmland values higher by creating values based on farmlands ability to generate superior income and capital appreciation that can be unlocked without selling outright. I look forward to hearing back from you and the possibility of discussing this with you in more detail. Regards, T. A. Dyer, President and Director of Marketing Farmland Marketing Group, Inc. 699 Walnut Street Suite 400 Des Moines, IA 50309 866-800 7039 ext. 40 563-271-2037 cellular todd@farmlandmarketinggroup.com


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