Wet Ground Fails to Sell at Havelock Auction

Nearly thirty bidders in the Havelock Amvets hall today offered only two bids for farmland adjoining the town to the northeast.  Neither bid came close to the seller's reserve.

The auctioneer from Farmer's National said he had been offered $4000 per acre for the land when he opened the bidding.  He soon garnered a bid for $4100 but that was it.

After a recess he said the Lloyd Peterson trust sellers wanted $7200 for the 146 acres.  No one would bid that much.

The land is a mile from the drainage ditch west of town.  The sale bill says a large county tile line already exists on the property.  The land has no legal restrictions regarding drainage potential.

Under the CSR II regime the property is rated at nearly 83.  It is largely Canisteo, Webster, and Nicollet soils which rate at 86 or better on CSR II.  The CSR ratings assume optimal tiling.  This property also has more than ten percent of its acres in Knoke and Okoboji soils which rate only 55 even on the more generous CSR II scale.

One neighbor commented that at least the field has a crop this year.  Last year about a third of it was drowned out, he said.  Another farmer reported an auction yesterday in Pocahontas had the same result--no sale--on land that is said to always be either drowned out or burnt up.

Just before the sale corn at the local Pro Co-op had closed at $3.91, nearly the highest it has been since harvest.

Albert City Farmland: $11,500/Acre

An overflow crowd gathered at the Albert City town hall this morning for an auction of flat farmland. Eighty acres within sight of the Valero ethanol plant opened at $8000 and passed $10,000 within the first minute. The land is available for the purchaser to farm this spring. Sellers Everett and Sandra Nordine will pay the property taxes due next month, but the buyer must pay for fertilizer already applied since harvest.

The bidding stopped at $11,500/acre. The land has a corn suitability rating of 77.2. This means it sold for nearly $149/point, far above recent auctions reported on this website.

On sale day corn was about $6.15 and beans about $12.08 in local cash markets.

Laurens Farmland Auctioned at $8980/Acre

An eighty acre farm field near Laurens sold today for $8980 per acre. The auction was held at the Amvets Hall in Havelock. About fifty people attended.

The property is bordered on two sides by roadways, leaving 76 acres of crops. Its corn suitability rating (CSR) is 80.2 which is high for Iowa farmland. The bid price is $112 per CSR point. Early this spring land at Rolfe sold for $101 per CSR point. Earlier this month Pocahontas land was auctioned at $106 per CSR point.

The land lies southeast of Laurens. It was owned by the children of Mary Kees and has been farmed by Bill and Christie Mather. It was purchased by Cindy Dubbert who lives nearby.

During the auction the price of corn was near $7 a bushel at the local markets. Soybeans were near $13. Both markets were up from the previous week.

Pocahontas Farm Auction: $8900/Acre

An eighty acre tract of flat farmland five miles south and four miles east of Pocahontas was auctioned this morning for $8900/acre. It was the Hermon Tjaden property, currently farmed by tenant Bob Beneke. The 2001 cash rent is $15,400, according the auctioneer's statement today.

Bidding was brisk. The auctioneer, Lowderman Auction and Real Estate, said there would be no breaks or timeouts. However he did pause after about five minutes of bidding to acknowledge the property "can be a little wet." Five minutes later the auction was complete.

The land is 80% Webster soil. The tract has a corn suitability rating (CSR) near 84. Pocahontas County's average CSR is only 74. The CSR system assumes drain tile has been added wherever necessary.

Dividing the bid price by the CSR yields a ratio of $106 per CSR point. Earlier this spring a 120 acre Rolfe parcel sold for $101 per CSR point.

One audience member left the auction saying, "I'm going home to put up some For Sale signs."

On auction day the local price for corn was $7.31; for soybeans, $13.75. Both prices are higher than in March when the Rolfe auction occurred.

New Use for Rock Island RR Right of Way?

Updated within.

A vague plan to revive the old Rock Island Railroad right of way (perhaps) through Pocahontas County will be considered at several area public meetings this week. One will be held in Pocahontas on Friday.

The new use is for electric transmission lines to carry wind power out of the state. It is called the Rock Island Clean Line. It is one of several proposals being considered by various parties who want to profit from wind turbines.

Update: It became clear at the open house that poetic license has been used in naming the project after the Rock Island. The new power lines will not follow the old railroad lines. In fact towns will avoided as much as possible. As with the original Rock Island, the new lines run southeast from this area. Another similarity is that both the railroad and the electric lines serve a similar purpose--getting rural resources to urban markets. The railroads carried grain and livestock. The electric lines will carry wind power.

The Rock Island Railroad dissolved in bankruptcy in the early 1980s. One of its routes ran from Watertown, S.D, to Des Moines, passing through Laurens, Pocahontas, and Manson. In this area it was mostly converted to farmland. The Laurens hiking trail now occupies the old railroad route on the south side of town.

Another set of tracks ran through Estherville, Emmetsburg, Livermore,and Cedar Rapids.

Thursdays hearing will be at the Pocahontas Expo Center, 8am-10am. It is hosted by Clean Line Energy Partners of Houston, Texas. This is a chance for us to learn their plans and for them to gauge our hospitality or hostility to the possibility of a new transmission line through the county.

Similar hearings are in Storm Lake, Spencer, Emmetsburg, Cherokee and Paullina beginning Tuesday, May 31. Comments may be submitted on line here.

Municipal Cable Puts Laurens On Map

Laurens has been put on the map, thanks to its city-wide municipal cable and broadband service. Few communities on the US have such a system to protect themselves from "a looming broadband monopoly." Laurens built its hybrid fiber optic and coaxial cable system in 1998. The map was created and published last month.

In some states it is illegal to create a broadband service that is owned by the public, due to legislation pushed by corporations such as Comcast and AT & T.

Eighteen other Iowa towns are on the map as well, including Spencer, Storm Lake, Algona, Mapleton, Sanborn, Orange City, and Coon Rapids. Only some 78 cities appear along with Laurens. An additional 54 cities on the map have even better public systems which offer the gold standard--fiber optics into the home.

Together these 133 municipalities serve three million people (just one percent of the USA), according to a report by the Institute for Local Self-Reliance in Minneapolis.

From the report:

. . it appears that the federal government is
unwilling to stand up to powerful corporations to defend the public good. This is where community owned networks come in. The citizens and businesses in each of the towns on our map have a network that will offer access to the open Internet– because they own the network and they make the rules for it.

The report alleges that elsewhere in the US "Comcast owns the internet" because it owns so much of the infrastructure over which traffic must flow.

The report continues:

Wireless providers may increasingly compete with DSL networks, but cable networks will continue to offer higher capacity connections than either.

Laurens Municipal Power & Communications has a website that details its history and rates for services.

Rolfe Land Brings $6775/Acre

Fifty people gathered at the Rolfe Community Center this morning for the auction of 120 acres of farmland a mile north of town. It was last on the market in 1966 when it was purchased by Jim and Esther Wilson. The high bidder today was a local dairyman, Dean Duitscher, who bid $6775/acre. The runner-up bidder was also an area farmer.

The land has no buildings. It is on Hwy 15. It is rolling and has at least one terrace. The corn suitability rating (CSR) is 69.7 on the 115.3 net acres. The gross price divided by the net acres and the CSR produces a value of $101/CSR point. The current tenant has a lease that extends through this summer.

More details about the property were still available on the auctioneer's website immediately after the sale.

Yesterday the local price of corn was $6.82/bushel. Soybeans were selling for $13.47/bushel.

Cellulosic Ethanol Alters the Landscape

Here wait several hundred large square bales of cornstalks in a field north of Ware. The Poet ethanol plant in Emmetsburg now buys such bales for its experimental process of making ethanol from cellulose rather than from grain. This is the first year of the experiment which is funded in part by the Iowa Power Fund. Newly elected Republicans have been skeptical of the fund which was created by the defeated Governor Culver.

Meanwhile Iowa State's Bruce Babcock says the ethanol blender's credit should not be renewed next month. It does little to boost ethanol production, he says, and points to the way it subsidizes exported ethanol. At present the oil companies benefit from the subsidy as much as farmers do, according to Babcock.

POET Ethanol Plant Powered by New Federal Subsidy

Late this fall bales of corn stover will pass by Laurens on their way to become cellulosic ethanol at the POET plant southeast of Emmetsburg. The bales will have come all the way from Carroll. Eighty-five farmers have signed four year contracts to provide the bales. Most are within thirty-five miles of Emmetsburg.

POET held a kick-off celebration on site Monday. Governor Culver spoke to the crowd of about one hundred. Researchers from Iowa State and Idaho National Laboratory discussed positive findings that support the dream of cellulosic ethanol.

But what really makes it happen is a new federal subsidy tucked into the 2008 farm bill called the biofuels crop assistance program. It pays $45/ton to farmers who supply corn stover for ethanol. With that incentive POET had no trouble finding a supply of stover for this fall. Some 56,000 acres are under contract.

Without the subsidy the cost of baling and hauling the stover and the cost of replacing the fertility that is removed from the field would eat up the full payment farmer's could command from an ethanol plant. No subsidy, no ethanol.

The POET plant expects to need six times as much stover in a few years. New opportunities to supply the plant may be available next fall.

For this year the plant prefers large square bales. Balers from Kansas and elsewhere are expected to help in this area this fall, according to Aaron Bloom of Albert City, a financial consultant with Ag Performance of Buffalo Center, Iowa.

POET has abandoned earlier plans to use corn cobs. They were unable to convince farmers to slow harvest and separate the cobs. Now they plan to buy "whatever comes out the back of the combine." Corn stalks are not as desirable as the leaf, husk, and cob mixture that can be wind-rowed by the combine and baled without additional chopping or raking. An eight row corn head is said to work perfectly. About one ton of desirable stover can be harvested from one acre of corn in this manner.

ISU: Keep Farm Rent Steady

Prices for crops and crop inputs have stabilized. Farm rents should do the same, according to Iowa State University extension farm management specialist Tom Olsen, who spoke Friday in Emmetsburg. "Steady as you go," Olson said.

The big picture is still one of national recession with a lesser effect on agriculture. Changes to a one-year-old lease are not really needed, he said, "But maybe the rent should be down a little bit." If the lease was negotiated several years ago when prices were more volatile, big changes may be appropriate.

Current cash rent rates in the Laurens area average near $190/acre for high quality land, according to an ISU survey. Two-thirds of the farmland in this area is rented to tenants. Since the 1920s more than half of Iowa's land has been farmed by tenants.

Land values have risen 8% in the Midwest according to the Federal Reserve Ag Letter of May 2010, but the number of land sales in 2009 declined 25% compared to a year earlier. The main driver of high land prices is low interest rates (see photo below). "Keep your head down. Don't leverage two farms to buy a third farm," Olsen advised.

Farm rent agreements automatically renew on September 1 unless either tenant or landlord cancels the lease in writing. Now is the time to decide if changes are needed.

Olsen also suggested farmers learn to use on-line resources such as the Web Soil Survey and the ISU Ag Decision Maker. Olsen can be reached at tolsen@iastate.edu.