In September, a well-known, turn-key cattle operation in southwest Wisconsin went up for auction. The 818-acre WoodHill Farms, located in Vernon County, sold for $6,645,000. That was an average of $8,123 per acre.
(Image Courtesy: Peoples Company)
Travis Smock, one of the Peoples Company agents handling the sale, said there was a lot of interest from potential buyers located all over the country. He thinks the sale price exceeded expectations, but it wasn’t a total shock.
“A farm this size is very uncommon. Also, it’s a high-quality property that was well managed for a lot of years,” said Smock, who recently closed on his 300th transaction since joining the company a decade ago.
The property sits along the Driftless Area, near the Mississippi River about 30 miles southeast of La Crosse. And it provided three-fold appeal in auction: farmland, pasture, and recreational land.
Farms like this don’t go on the market often. They are usually handed down to family or sold directly to neighbors. In this case, part of the land had been in one of the owner’s families since 1902.
When a property like this goes to auction, it can bring top dollar. That is what happened.
The average sale price for farmland in Wisconsin so far in 2024 is $6,384 an acre, according to Heather Schlesser with the University of Wisconsin Farm Management Division of Extension.
This western Wisconsin sale generated $1,739 more per acre than the average statewide price.
The farm economy in Wisconsin – like it has in many other states -- has been a challenging one in the last few years. Low commodity prices, destructive weather, higher input costs, and elevated interest rates have been a strain.
In Wisconsin, smaller dairy farmers have also struggled to keep afloat with some selling to larger operations or leaving the industry altogether.
With all these economic pressures, where are farmland prices headed?
Schlesser, who compiles and studies land transactions in the state, says prices continue to increase. But she said that farmland values are appreciating at a slower rate than in previous years. In a report she published, she wrote that between 2012 and 2020 the average annual growth in Wisconsin agricultural land value was 3%.
In comparison, between 2020 and 2023, the average annual growth in value was 10%. She added that it is unknown how long land prices will continue to increase at this heightened rate, but there does appear to be a slowing in the price increase.
When American Farmland Owner asked what has kept land values from falling in Wisconsin, Schlesser shared this: “While I cannot answer this definitively, it depends on what part of the state you are in. In the more agricultural areas of the state, the high prices are driven by farms that want or need more land base to stay in operation. For land being sold in areas of the state that are more populated, the population sprawl is driving the prices up.”
While the price increase seems to be slowing, the number of acres sold is continuing a downward trend. Schlesser’s data showed that in 2022, Wisconsin saw 26% fewer acre sales compared to 2021. In 2023, there were 44% fewer acre sales than in 2022. And so far in 2024, there have been 32,990 acres sold compared to 68,206 in all last year.
Not as many acres have changed ownership hands over the past several years.
One other thing Schlesser published in a 2023 end of year report shows that Wisconsin farmland owners have weathered economic challenges well.
“Despite the difficult economic conditions and substantial losses in the number of dairy farms over the last few years, the land market has been supported by the ability of landowners to hold onto their property and limit the supply of land on the market,” Schlesser wrote.
She continued, “most landowners, even those forced to exit the dairy industry, were not forced to sell their land. Most could continue cropping or renting the land. Thus, limiting the supply of land on the market helped support market values. In some areas, other factors, such as urban sprawl, have helped to maintain or even bring up land values.”
RELATED: Indiana’s farmland values are softening. Check out this American Farmland Owner report that looks at the latest trends.