# Land auction sets state record



## Springer (Dec 21, 2004)

Sounds like a couple of guys that wouldn't quit bidding.

NORTH DAKOTA: Land auction sets state record
By Stephen J. Lee, Herald Staff Writer
Published Friday, February 01, 2008
A state record in farmland prices apparently was set last week at an auction in Grafton, N.D.

According to bankers who have knowledge of the sale, a parcel of land sold for nearly $5,700 an acre. That's more than $1,000 higher than what is thought to be the previous record, hit in November, also in Walsh County.

Steve Rehovsky, newly named (as of Wednesday) president of First United Bank in Park River, N.D., said he was told details of the auction and bidding by good sources.
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The land was a "short quarter," about 140 acres or so, about a mile or two south of St. Thomas, N.D., that was part of a Folson farm, now in probate.

It was advertised as "prime farmland," by Botsford and Qualey Land Co., in Grand Forks, which set up the auction. Held in the Bremer Bank in Grafton last Friday, it involved the 10 people who had submitted the top written bids on the land, in a round of oral bidding.

Rehovsky and others say the winning bidder was Alan Collette, a large beet and potato farmer from Grafton. His main rival had been Kenny Johnson of Walhalla, N.D., part of the largest farming operation in the state and then some.

Terms were advertised as cash in full within 30 days (which would be nearly $900,000) or contract for deed with 25 percent down and the balance amortized over three years at 8 percent.

John Botsford said he couldn't comment on the terms of the sale because of ongoing negotiations with Collette.

Rehovsky said that Collette reportedly has the option to buy more Folson land at the same price.

It's part of what experts are calling historic levels in farmland prices spurred by a historically unique year of record or near-record crop prices across the board coupled with pretty good crops across the board.

Wheat prices rose over $10, and farmers now can forward-sell their 2008 crop for $10 a bushel. Soybeans are at $12 a bushel, more than twice a normally good price. Barley, corn, edible beans, sunflowers - all are at high levels.

While most farmers didn't get the top prices, but sold on the way up, they are having about the best year in memory, financially, and have money to spend.

And one of the main things they spend it on is more land, which is seen as one of the best investments, too.

There are stories of land bought a year ago that was virtually paid off by the extra profits made this year. Some of the best farmland has appreciated by 40 percent in value this past year, while most has gone up 15 percent at least, experts said. And that's after several years of record increases in land values in the state, especially in the Red River Valley.

In November, a quarter-section of land near Voss, N.D., in Walsh County, sold for $4,350 an acre. That was thought to be a record, in nominal dollars, at least, for farmland that's staying farmland. (Farmland sold for commercial development, especially around the Fargo area, sells for much higher, in many cases.)

Rehovsky and others say they never have heard of anything near the $5,680 or so per acre that was reportedly the price Collette bid Friday for the parcel near St. Thomas.

Even in constant dollars, it appears to be a record in the state. Back in about 1980, when land prices rose to record levels, some farmland sold for $2,000 to $2,200 an acre in the Red River Valley. That would be about $5,000 in today's dollars, based on general inflation measures.

So, while it may be a record, it may not say so much about the general trend as about the utter top.

"I don't think it's representative of the market," Rehovsky said of the single sale in Grafton last week. "I know there was a quarter sold (this week) east of Grafton . . . that was more like $2,600 an acre."

Collette is known as a very selective and aggressive buyer of top Valley land.

The Johnson Farms of Walhalla also is known as an operation with deep pockets that has bought up lots of Red River Valley farmland in recent years.


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## h2ofwlr (Feb 6, 2004)

This "wild" pricing is good for nobody in the long haul. It will surely come down in price in a few years, way down as I've seen the cycles, and the many bankruptcies and farm auctions of the early 1980s' and again during the drought in 88-91. Somebody always gets holding the bag of a big loss.

And this is not good for wildlife either, the demands the high prices are putting on farmers to plow every square inch of land is unreal.

And this is ALL about the slight of hand trick that the big AG COs played in selling the idea that ethynol is good for us, when it is not. It takes 100.000btu to make 102,000btu As a result corn prices rose, and crops normally planted for other type of crops skyrocketted as the farmers rushed to plant more corn. A huge chain reaction over a bad policy for the US citizens. Look at eggs, almost doubled in price in a years time. Pork, beef, etc all has gone up sharpley as they eat grain products, namely corn. Milk, Cerals, flour, etc, all have gone up too for all of us. Again all over the ethynol industries false promises the "yellow and green is good for us" It is total BS. And nobody bothers to mention the millions of gallons of water it takes each day to run those ethynol plants. Nor that the gas mileage when using ethynol is much poorer, like 25% worse when using E85 vs petroluem based gas.

And back to land prices, now estate taxes will be based upon these new prices if a person dies and the heirs have to pay these higher taxes--and most can not afford it. And so how can a young man buy say his Gfathers farm at these prices? They can't, so the the big AG farm corps will buy the land. Not good at all nfor the farmers or America.

Ethynol using corn is the worst thing that has happened to America in the last 40 years general economy as the working poor can not afford to put food on the table., and the working poor as a % of the population is getting bigger and bigger every day.


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## Sasha and Abby (May 11, 2004)

Just a cycle... as it always does, this one too will come to an end eventually.


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## dieseldog (Aug 9, 2004)

If you are going to complain about ETHANOL at least learn how to freaking spell it right. SOunds like you got all the answers. I would rather a farmer buy it than some rich guy just to have it to hunt.


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## barebackjack (Sep 5, 2006)

h2ofwlr said:


> Nor that the gas mileage when using ethynol is much poorer, like 25% worse when using E85 vs petroluem based gas.


I know a few people burning E85 that report nowhere near a 25% reduction in mileage. A slight reduction, yes, but not even close to 25%.

I agree, id rather see local farmers buying it for production purposes than out of staters or cities for "development". At least if its in production ag its giveing something back to wildlife. I hate urban sprawl.

And yes, we are going to see more tillable acres put back into production ag. Populations are growing, prices are good, urban sprawl is eating up land, people gotta eat, people gotta drive, and farmers gotta earn an income.


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## h2ofwlr (Feb 6, 2004)

dieseldog said:


> I would rather a farmer buy it than some rich guy just to have it to hunt.


 No arguement there what so ever. I actually expressed my concerns that future generations will not be able to buy the land on the family farm due to inflated prices and estate taxes.


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## angus 1 (Jan 14, 2007)

h2ofwlr , my thoughts exactly.


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## dakotashooter2 (Oct 31, 2003)

It was just reported that the number of farms in ND is down by 200. Given what we are seeing in land prices is it any wonder. Like mentioned it is getting nearly impossible for a young farmer to buy out or even inherit the family farm.

FWIW I do think some of the bidding on this last parcel was all ego. Rumor around here has it that the bidding stalled at around the $4,800 mark and made the jump to $5,600 in one or two bids.

Actually around here there is little risk of land being bought for hunting purposes in this general area as the land is too valuable not to farm. Very little is in CRP around here. The only cover is shelter belts and even they are starting to disapear to accomodate the large equipment.

On the upside the 1/4 my wife is going to inherit is going to be worth a good chunk of change (if we can aford the inheritance tax).

Just my luck to marry a farmers daughter that has crummy beet and potato land instead of good hunting ground.


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