PETER SALTER Lincoln Journal Star
Nine bidders were initially interested in the Falls City-area farmland.
They opened at $1,000 per acre, and took turns driving the price higher.
Past its assessed value of $4,185 per acre. Past the UNL 2022 Nebraska Farm Real Estate Report’s average of $6,070 per acre for all farmland in the southeast region.
And even with a week left in the month-long online auction, past the report’s average of nearly $10,000 per acre for center pivot-irrigated land — and these 117 acres weren’t even irrigated.
Auctioneer Jason Smith of DreamDirt didn’t know what to think.
“It’s close to Falls City. It’s on a hard-surface road. But other than that, it’s fairly unremarkable. A lot of people call me and joke and say there must be gold buried out there.”
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After bidding reached $17,000 an acre, just two potential buyers remained. They kept bidding until one of them blinked — and the other had the high bid at $27,400.
And that could be a record sale price for Nebraska farmland, Smith said. Or not. Despite investigating his office he did — finding what he believes to be the previous high of $17,800 — there appears to be no central clearinghouse of Nebraska farm sale prices.
“I know, but I don’t know,” the auctioneer said. “In other words, I can’t prove it’s a record because nobody really keeps track of that. But that said, I can’t find any examples that are higher.”
Jim Jansen, an agriculture economist extension educator at the University of Nebraska-Lincoln who helps compile the farmland real estate report, knew of farmland that sold for higher, but it was bought by developers for uses that didn’t include farming.
He couldn’t recall a farmer-to-farmer sale going higher.
“If it’s not a record, it’s on the upper end.”
Jay Rempe, a senior economist for the Nebraska Farm Bureau, is from Falls City and was surprised — “flummoxed” — that land there could potentially set a record.
But I have suggested three possible price-driving forces for farmland. First, with at or near-record farm income this year and last, some farmers have the means. Also, real estate can be a stable investment in an uncertain economy.
And finally, scarcity of land: “Oftentimes, farmers have a once-in-a-lifetime opportunity to purchase a nearby piece of ground that would work nicely into their operation and they pay up to not miss the opportunity to purchase the ground,” Rempe said in an email.
And that’s what happened on the east edge of Falls City. Brothers David and Steven Frederick farm neighboring ground, and they wanted to add to their operation — to leave something for their sons and grandsons to work when they’re gone, David Frederick said.
They plan to grow it, not develop it.
“It’s just a piece of land that lays next to us. We farm. That’s what we do.”
They didn’t expect to pay apparent record prices, but then they ended up in a bidding war with Falls City’s best-known businessman.
Charles Herbster, owner of Conklin Co., had his eye on the property, too.
“It’s right on the highway, it’s a very good farm. It’s a beautiful farm that lays totally flat,” he said.
The former candidate for governor was trying to buy it as farmland, but also could envision developing it, perhaps with a future use for Conklin.
In 2019, Herbster broke an auction record when he paid $1.51 million for a black Angus bull for breeding.
But last week, he stopped short of another possible record when he ended his bidding at $27,000, leaving the Frederick brothers to walk away with a $3.2 million bill from Smith, the surprised auctioneer.
“It wasn’t something you could have predicted was going to happen,” Smith said. “Two people just wanted it really badly.”