The U.S. farmland market is changing, according to Jim Rothermich of Iowa Appraisal. He recently joined the Top Producer podcast to share the ways he’s seeing the transition occur.
“Auctioneers are struggling to get some of it sold,” Rothermich says. “We had 27 no sales [in Iowa] in the first six months of this year. That’s a lot.”
After multiple years of a red-hot land market, the high number of no sales is a new trend to watch.
“Auctioneers are saying the last bid has been 10% to 20% below the reserve,” he says. “If I was to put the last bid of no-sale auctions in my data, I would say the market would be closer to 4% or 5% down from a year ago.”
Rothermich adds the market is down about 6% from its peak in 2022, which he sees as relatively healthy in comparison to current commodity prices. But that downward trend is still troubling some auctioneers.
“Just from visiting with the auctioneers, I know they’re concerned right now,” he says. “They think they’re going to have a fairly active fall selling season, but they’re worried people are going to start pulling back. And I see that happening, going forward.”
Despite the softening overall, he believes high-quality farm ground will still sell for a premium.
“Buyers will still pay up for good ground,” Rothermich says. “I analyzed the top 25 sales from the first six months of last year and this year, and there was essentially no difference. It was maybe less than 1% different.”
Rothermich is still anticipating an active auction season this fall and encourages potential buyers to do their research and stay informed.
“Market conditions are changing. They’re trending down, and there’s going to be some opportunities out there,” he says.
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