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Farmland Market Remains Active, Despite Lower Commodity Prices

Schrader Real Estate and Auction Company continued to see large crowds of active bidders during 2014, according to company President R.D. Schrader.

While noting that "prices have fallen off a bit" in some areas due to lower commodity prices, he said the company found active markets in 2014 well beyond the Midwest. In a week-long series of major auctions in six states, the company sold 13,450 acres for a total of $46.3 million. "We had good participation and successful auctions in the Delta, Southwest and Mountain regions, as well as the Midwest," he said.

"For the year, we averaged more than two farmland auctions a week, successfully selling farms of every conceivable size and quality," he said. "Buyers are more selective, and if interest rates rise in combination with lower commodity prices, that will impact demand. But the market is still there. The agriculture industry remains very strong. It's important in this environment to make sure you're marketing the property effectively, which is always a priority for us."

Schrader said he remains optimistic. "Long term, farmland remains very attractive, especially when you consider the alternatives. We've seen wild one-day swings in stocks, and interest rates continue at all-time lows. Meanwhile, over the last decade, Midwestern farmland has been appreciating at an average rate of more than 10 percent per year," he said.

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