Rice and soybean ground, farmed by the same family for nearly 20 years, changed hands this year in Woodruff County, Arkansas. The broker handling the sale, Jeffrey Hignight, is with Glaub Farm Management, out of Jonesboro. He said the 786 acres sold were almost all tillable and came with six irrigation wells.
The property had a lot of things buyers in the region look for, and it brought a price well above the average. Hignight reported the land sold for close to $3 million, or $3,688 per acre. This year’s average per-acre price for cropland in the state is $2,790.
“Top-quality land here is irrigated, precision-leveled, adequately drained and not in a flood-prone area,” he said. He noted discounts are expected if the area is flood prone or fields are oddly shaped, as this makes them difficult to farm and lowers production.
“Overall appearance matters, too,” he said. “If a farm is sold in the growing season, and it’s obvious weeds have not been controlled, the seller should expect discounts.”
In the case of the Woodruff County farm, the property sold through a listing — although Hignight said the firm also does auctions. He’s seen prices climb about 3% this year, and his outlook is for a steady market going into 2018.
“I really don’t anticipate any major shifts up or down,” he said. “We also don’t anticipate a large inventory of land to be for sale. That helps to hold prices, because there are definitely buyers out there for what becomes available.”
Most of the farmland in Arkansas is owned by absentee landowners, family members or investors, he added. “It’s been that way a long time in this area.”
As for financing, Hignight said the majority of Glaub’s clients are still paying with cash. When someone finances, it’s generally a 50% loan-to-value arrangement.
“Anything above that, and the lender looks at how they will cash-flow the property,” he said. “Given today’s low commodity prices, that generally means there needs to be outside income or equity going into the deal.”
Victoria Myers can be reached at firstname.lastname@example.org