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Schrader: Farmland demand continues even into Covid-19 period
Farmland prices are continuing to show strength, even as the scope of the Covid-19-driven turmoil impacts most of the economy, according to R.D. Schrader, president of Schrader Real Estate and Auction Company.
Schrader joined with Kala Jenkins, of K-Coe Isom, an accounting firm specializing in agriculture, for a webinar addressing the needs of farmers and farmland investors.
揑n our auctions, we抮e finding there抯 a lot of demand for land, and we抮e seeing intense competition,?said Schrader.
He attributed the demand to multiple factors, including very low interest rates and a desire for diversification in the face of extreme stock market volatility. 揥e抳e also had a good bit of 1031 exchange activity,?he said.
Schrader pointed to several recent auctions, including one in Franklin County, Indiana. That auction, held in mid-February before the Covid restrictions, attracted 43 bidders, with the land selling for $10,745 per acre. 揑n this case the buyer was an investor, but the bidding by operators pushed it up,?he said.
Despite Covid, the company抯 auctions have continued to attract strong fields of bidders, resulting in successful auctions in March and April in Indiana, Illinois, Wisconsin and Ohio.
揙f course, our sample of land auctions during the Covid period is somewhat limited, but so far it has been consistent with the strong demand in the winter months,?said Schrader.
Looking ahead, Schrader said land values may be affected by concerns over lower farm income due to low commodity prices if farm commodity prices don抰 rebound. However, he pointed to continued strength in demand, coupled with extremely low interest rates and limited land supply.
Jenkins, of K-Coe Isom, focused on the various government programs available to farmers and how farmers can take best advantage of them.