What started for agriculture with the arrival of 2020 as a bump in optimism is today looking more like a train wreck for producers. Tomorrow, the outlook can change but at this moment in time, grain prices are low, livestock prices are low, milk prices are low, and no one knows when or exactly how demand and prices will rebuild throughout the year.
There potentially are bright spots looking ahead for increased demand for commodities and meats around the world and for US farmers, there will be increased government support to help mitigate some of the market losses.
The agricultural land market came into 2020 with a bit of strength from farmer optimism after coming off a bit better year for most than was expected along with the continued low amount of good land for sale on the market.
Overall, there were fewer farms on the market than the past several years which supported prices. As the Covid-19 response measures the world over took affect, production agriculture and the food chain came to the forefront of concerns. With the spread of the virus and the compounding effects in the food and fiber supply chain, commodity prices tumbled.
Land auctions continued during March and April albeit with social distancing procedures in place. What were to be public auctions became stay in your pickup in the parking lot live auctions, bid sales, or on-line auctions.
Sale outcomes varied by region and property. In Iowa, the land market became more cautious than some areas as the livestock and ethanol industries are critical for Iowa agriculture and both endured mounting bad news. In other areas, land sale prices were stable as demand for good quality land was more than adequate for what did come up for sale.
At Farmers National Company, there remains a mostly normal amount of sellers wanting to list their farms for sale as they look for a trusted professional to handle their sale during these uncertain times. We also have buyers looking at our listings and making offers. The land market continues at a somewhat slower and more cautious pace as it transitions into spring and summer.