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'Made a little history' as Saline County farm goes for $10,700 per acre (Updated 12:40 p.m. Monday)

Friday, February 18, 2011

(Photo)
Auctioneer Billy Summers gets the bidding started for the McBurney farm shortly after 2 p.m. Friday, Feb. 18.
(Eric Crump/Democrat-News)
"Made a little history today."

That's how Don Huff, the Marshall attorney representing seller Blaine Murrell McBurney, described the sale price of a 160-acre farm near Malta Bend.

When auctioneer Billy Summers determined that the bidding had stopped, the price stood at $10,700 per acre, a record, by all accounts, for Saline County farmland.

(Photo)
A room at Martin Community Center was standing-room-only for the McBurney farm sale Friday afternoon, Feb. 18.
(Eric Crump/Democrat-News)
In the end, the final bidder was Gary Baxter, a "farmer from up around Norborne," said Summers.

He said from the large crowd of 175-200 people, several raised their hand to bid.

"Probably 12 or 14 different people bid. We probably started at $5,000 or $6,000 and everybody bid. It didn't take long," said Summers, who said there were still several bidders at the end.

The 160-acre tract had been owned by the Murrell family for over 80 years and farmed by the Carter family of Malta Bend for the same amount of years. It is located just a 1/2 mile east of Route N highway in an area once called the "petit saux plains," according to Saline County history.

The 1880's Saline County history book said that the area, now called the "plains" or "flats" by local farmers is "unrivaled in fertility and productiveness by any on this continent."

It still carries that reputation today, according to Summers.

"Everybody knows that land, people all over the state of Missouri, they know that land and we had people there from every surrounding state," he said, adding that people from as far away as Illinois, Iowa and Arkansas were present at the sale. "Some of them were buyers and some of them were curious. Most of them that were there out of state had an interest here. They either owned some land around there close or over in Carroll County."

According to the sale bill, the farm was 99 percent tillable and had a ten year average yield for corn of 206 bushels per acre and 60 bushels per acre for soybeans. In Missouri, the average corn yields are closer to the 150 bushel per acre mark, while Iowa, the nation's largest corn producing state had an average of yield of 168 bushels per acre in 2008, after peaking at 184 bushels per acre in 2004. Saline County, which is usually the first or second, corn producing county in Missouri averaged 164 bushels per acre in 2008.

"People just know that land. That's just a wellknown fact, land like that produces," he added.

Because of the interest they heard prior to the sale, coupled with the land quality, as well as the fact that land in the "plains" rarely sells, he wasn't that surprised by the record price.

"There were a lot of rumors going around, Yeah, we thought it would be pretty close to it," he said. "It's been known for years, that joysilt loam soil there. There is just a small area that is really high productive land. That's the kind of land everybody wants now."

Because of record crop prices, record farmland sales have been taking place all over the nation, especially in high crop producing areas.

An article by the Sioux City Journal recorded a farm sale bringing $10,000 per acre on Feb. 3 in LeMars, Iowa.

According to the article "farmland values have soared to all-time highs, with few signs of peaking yet. In Iowa and eastern Nebraska, average values rose 16 percent and 10 percent, respectively, in the last half of 2010, compared to a year earlier, according to a survey by Farm Credit Services of America, the largest agriculture lender in the two states."

The story states that "some of the nation's most expensive land is found in Northwest Iowa, where a series of post-harvest auctions have netted $9,000 or more per acre. One 80-acre tract in Sioux County brought an eye-popping per-acre price of $13,950 in November."

An article by the FDIC (Federal Deposit Insurance Corporation) stated that farmland values have risen dramatically across the United States during the past several years. Between 1993 and 2003, inflation-adjusted farmland prices were quite stable, increasing by 3.0 percent per year Since 2004, however, prices have jumped by an average of 11 percent annually.

At $2,350 per acre, across the U.S. average farmland values are more than 20 percent higher than their historic peak of $1,940 recorded in 1981.

"Today, farmland values are rising at a pace reminiscent of the 1970s, raising concerns that another agricultural crisis may occur if land prices decline," according to the FDIC article.

Contact Marcia Gorrell at mgorrell@marshallnews.com

On the web:

http://www.fdic.gov/bank/analytical/quar... and

http://siouxcityjournal.com/news/local/a...


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I have been out of town and was unable to be at this land sale. We will adding more to the story on Monday, but I wanted to attempt to answer some of the questions asked here.

Anyone who has been at any sale, who has bid on anything, whether it be a plate or a piece of furniture, knows that auctions often don't reflect what something is actually worth, it only reflects what something it is worth to at least two people in the crowd.

The 1880s Saline County history book called the area where this farm is located the "petite saw" plains. In that book, it was written that this part of ground near Malta Bend, is "unrivaled in fertility and productiveness by any on this continent." Now the area is usually called "the plains," or the "flats," and still carries a reputation in U.S. ag circles of being highly productive.

This piece of ground also has a reputation of being one of the better in that area, because it has good drainage, often a drawback in land so level as the Malta Bend plains. According to the sale bill, this 160 acre farm had a 10 year average yield of 206 bushels per acre of corn and 60 bushels of soybeans, which rivals yields in Iowa and Illinois. Because of record high grain prices, land in those areas have also brought record high land prices lately.

It is very rare for land in this area to sell, as families tend to keep it for many generations, as they would a family heirloom. In 26 years, I remember only 3 public auctions for land in this area and each time it sold for what was then record prices.

In agriculture circles, this sale generated unusually high interest because it is so rare for ground in this area to sell, and brought in buyers from across the country.

In my opinion, the story is not why someone sold or bought it, it is actually that this ground sold at all and that it generated so much interest from outside of Saline County.

Here is more on the current U.S. trend towards higher land prices and the fear of some that this will turnout like the 1980s. http://www.fdic.gov/bank/analytical/quar...

-- Posted by Marcia Gorrell on Sun, Feb 20, 2011, at 10:39 AM

So we pay increasing taxes for inflation? hmmm I thought our property was assessed on actual value? So if you can't give property away do to low market prices, this never effects your taxes does it! Roll backs never mean anything, taxes never go down. Doesn't matter what the market conditions are. The State also needs to rescind the statute that sets the assessors salary based on the assessed valuation of the county, Bad Law!

I bet this sale price makes the assessor take notice...If this property sold for this much, then it must be worth the price and should be taxed accordingly?? Is the taxes on this property going to be based off of current sale price or the old assessed valuation? What I am trying to get at is what will the assessor use to determine the value of this land now to assess the proper taxes?? If this piece of property is now worth the selling price, then is all the land in the area now worth alot more?

-- Posted by Gumby on Sun, Feb 20, 2011, at 5:23 AM

There has to be more to this story and why the ground was worth that amount? There had to be more than one bidder for it to has reached that price. Someone else must have been bidding almost that much.. .

Was the buyer a family member and the sentimental value worth it to him?

Curious minds want to know.

-- Posted by litlmissme on Sat, Feb 19, 2011, at 11:51 AM
Response by Eric Crump/Editor:
We'll have a followup story next week & will attempt to answer these questions.

Midas touch? Is anyone going to accuse this experienced auctioneer of having developed a Midas touch? I wonder what Billy thinks about this record.

-- Posted by former editor on Sat, Feb 19, 2011, at 9:18 AM

"Everybody is forgetting about the seller?" Well, let us all pause and reflect on someone who sold a farm for almost 2 million dollars, and the fact that he will have to pay some taxes on it. Our hearts go out to him and those like him....

-- Posted by stlvalleyalum on Sat, Feb 19, 2011, at 5:58 AM

I guess this will be a reason for the assessors office to assess all farm land at inflated prices?? Why is it when land is at it's peak, taxes go up, but when all property is in the tank and nothing is selling, taxes stay high?? Once taxes peak, they never come back down...This piece of land more than peaked, crazy...!

-- Posted by Gumby on Sat, Feb 19, 2011, at 12:54 AM
Response by Eric Crump/Editor:
The Hancock Amendment prohibits windfall revenues to local governments as a result of rising property values. If assessed valuations go up faster than inflation, tax rates have to be rolled back to account for the increase in tax revenues.

sounds like most of you are jealous of someone selling/buying this property, and wish it was you. he obviously wouldn't have bought it if he didn't have the resources to do so and make it work, so get over it and yourselves.

i'm more interested in the story of WHY the guy bought it, what he plans to do with it, WHY someone sold it, and what they plan to do with the money. not that it's any of my business, but since the demo-news made it an issue by sending out text alers that a property sold for a record price, i think we should know more about all this.

-- Posted by aikman8 on Sat, Feb 19, 2011, at 12:43 AM
Response by Eric Crump/Editor:
Our ag reporter, Marcia Gorrell, was not available to cover this event, or we probably would have had more details Friday. She's aware of the sale and will pursue a more in-depth followup story next week.

Never send a city boy to do a farm girl's work, I guess :)

Everybody is forgeting about the seller. He is going to pay a great deal of capital gains tax on all of that cash. The rate of capital gain is dependent on the whims of the legislature. But one thing is clear we small farmers in Malta Bend are going to really have a hard time paying for taxes. With people paying that much and Ag land is up for reassessment this year. That means that our taxes are going to go up. That is going to be tough. Grain prices are not going to be up as high as they are. Lots of people forget that Farmers don't always get the high price. Some of us try as we may we can not predict the price. I know that we did not sell at near the prices that they are now. Over the last few days they have been falling.

Note: the last name on the new Slater Medical Clinic.

-- Posted by movaldude on Fri, Feb 18, 2011, at 10:31 PM

I don't care if it is in Tetesaw Creek, that dirt had better have a lot of oil or gold under it!

-- Posted by captaingbb on Fri, Feb 18, 2011, at 9:02 PM

NanaDot, it's probably spend it or lose it to Uncle Sam.

-- Posted by born-n-raised on Fri, Feb 18, 2011, at 9:00 PM

No hard feelings Eric...everybody has got to do what they gotta do. ;)

-- Posted by Oklahoma Reader on Fri, Feb 18, 2011, at 6:29 PM

One an three quarters million dollars for one hundred and sixty acres? Is that right? Is that in the Tete Saw? Second bottom north of Malta Bend? Jes whereabouts is that land?

-- Posted by Oklahoma Reader on Fri, Feb 18, 2011, at 4:46 PM
Response by Eric Crump/Editor:
That's right. $1.71 million as I figure it. The sale flier says the land is at NE 1/4, Sec. 15, Township 51N Range 22. It's on 290th Road 1/2 mile from Route N.

That is CRAZY!!! It's buyers like that that pay way too much per acre that really make it hard on the average family farmer that wants to purchase land. The other comments are absolutely correct, obviously the buyer has the money because there is NO way to make money paying that much per acre for land if the money was borrowed. Saline county land is grossly overpriced as it is...WOW!!!

-- Posted by RedAngel on Fri, Feb 18, 2011, at 4:39 PM

I hope the buyers have the cash on hand, because even these grain prices will not make the loan payments at that price...You would never pay it free. And buying it out right your grand kids might make money on it one day.

-- Posted by drop555 on Fri, Feb 18, 2011, at 4:28 PM

Too good to be true? Sounds like a ridiculous precedent to me, and not the best business decision. Grain prices are not going to hold. But hey, now that I know there are several buyers out there, I have a nice little garden plot I am willing to negotiate about.

-- Posted by born-n-raised on Fri, Feb 18, 2011, at 3:40 PM

Wow and double wow, I have a farm in Saline County I would like to sell at that price. This sounds too good to be true, beware.

-- Posted by Grand Pass gal on Fri, Feb 18, 2011, at 3:28 PM


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