Auctions may help define direction of Illinois farmland prices
After spending much of the year on the biggest set of auctions in the company's history, the Murray Wise Associates team now faces a new challenge, with a lineup of Illinois sales that may give a hint at what's ahead for farmland prices.
The company will conduct two Illinois farmland auctions in a single day Thursday, Nov. 7, with two other auctions following close behind in Clay and Crawford counties.
"The first few sales at the end of harvest usually tell us a good bit, and this year, it will be especially interesting," said Joe Bubon, executive vice president of the auction company. "The Chicago Fed recently reported that while Illinois farmland prices were up 17 percent for the year ending July 1, they were actually down a percentage point for the quarter."
But, Bubon added, the volume for that quarter was low. "We'll get a clearer picture now as to whether that was a blip or whether a flatter market will establish itself," he said.
Murray Wise Associates hopes to build on the momentum from its $75 million set of auctions of vegetable land, packing plants and other assets – primarily in Florida and Virginia – in the bankruptcy of tomato packing giant East Coast Brokers and Packers.
"That was a unique opportunity for us, and kept us busy through the summer months. But the timing was good because it occurred during a lull in the Midwest, and we set numerous company records with it. Now, we're getting back to our bread and butter, with an opportunity to gauge the market for Midwestern land," he said.
In the first of the two Nov. 7 auctions, bidding will begin at 10 a.m. at the Royal Community Center for the sale of three tracts in Ogden Township. That afternoon, the auction team will move to the Franks Center in Philo for the sale of 200 acres in Crittenden Township.
"Both of these are very productive farms with good soils, and I think we will see some interest by investors as well as area farmers. The Clay and Crawford properties both have substantial tracts of contiguous farmland and recreational land. It will be telling to see if these sell to smaller buyers or what role the larger institutional buyers might play," said Bubon. "For quite a while, there has been a shortage of available farmland relative to demand, so this will be a very nice opportunity for someone to add to existing holdings."