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The assumption is that the COVID impact on farm real estate would be dramatic. However, between the delay in foreclosure actions by the courts, the stimulus money payments and the time of year it is interesting to see that while real estate auctions were down 36.5% compared to a year ago, the acres auctioned in that time period where only off by 1%. For those who are waiting to reap the harvest of cheap land prices, the sorrow may be their own and not of failed landowners.

Here are some interesting facts to consider about why farmland in Iowa remains largely unphased by the upheaval.

  1. 80% is estimated to have no debt. Taxes and insurance are pretty low on farm properties, making carrying it not as stressful as carrying a commercial building would be.
  2. Interest rates are historically low for those that do have to borrow. Banks continue to lend money to qualified borrowers even in stressful times, and land without debt helps qualify for sure.
  3. Land compared to the stock market is a comforting investment. You wake up with the same number of acres you went to bed with and the value doesn’t depend on who tweeted what about whom the night before.

By comparison in 2000-2002 when the tech industry screwed up the stock market (the Dot Com Crisis), the S&P 500 lost 44% and crop ground gained 18%. In 2007-2009, when the mortgage crisis was at its height, the S&P dropped 46% while crop ground gained 26%.

Every day, a new company goes public and offers a new stock investment opportunity. Every day, pave over productive farm ground and ask the remaining ground to do more with less. It is clear that land remains a solid investment.

CFAP program sign up is underway.  Sign up for the Coronavirus Food Assistance Program is open through August 28, 2020.    For producers who have suffered 5% or greater price decline. Relevant commodities in our area include barley, oats, soybeans, wheat, wool, cattle, hogs, sheep, Diary, Select vegetables and fruit.   Be patient with the folks at USDA, they are learning the program at the same time we are.

Navigable Waters Protection Rule” aka (New WOTUS) was articulated by the EPA and the Army Corps of Engineers and promptly challenged. Lawsuits have been filed by cattle trade association groups claiming the rule is too broad, and lawsuits have been filed by several states and environmental groups claiming the rule is too narrow. This isn’t the first change or challenge nor will it likely be the last. A collation of states are suing the EPA for not doing enough to protect the waters of the US. Other litigation over what is or isn’t include muddy up the court docket as well. The litigation flows slower than a creek in a July drought.

For an example, 2012, the US Supreme Court found that Idaho landowners could bring suit to challenge the EPA’s determination that their property was a “water of the United States” and a Section 404 permit was required under the Clean Water Act.  In April of this year, the EPA filed a motion to dismiss the case, which was opposed, and the appeals court agreed with the landowner. So back to court it goes. Some of these litigation events grow so long in the tooth that not only do they have birthdays, but they are in some cases eligible for driver’s permits.

Sunday, September 20, 2020
  • Patrick B. Dillon
  • Jill Dillon
Dillon Law PC
Patrick B. Dillon enjoys finding solutions to legal issues and catching problems for clients. Pat practices in the Sumner office regularly represents clients in district, associate district and magistrate courts for agricultural, real estate, criminal and collection issues. He drafts wills and trusts, creates estate plans and helps clients through the probate process.
Dillon Law PC
Jill Dillon focuses on family law, estate planning and IRS matters. Jill is a University of Northern Iowa undergraduate (Political Science Cum Laude) and a Drake University Law School graduate. Jill spent extensive time advocating for low income tax payers in front of the IRS and the State of Iowa Department of Revenue while at Drake.

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