ELGIN - A record farmland price for Van Wert County was established recently at an auction held for the Naomi Thomas Estate.
Bob Gamble, broker and auctioneer for Bee Gee Realty & Auction Co. conducted the auction. The land is located in southern Van Wert County near Elgin.
A standing-room-only crowd attended the auction which was held at the Van Wert County Fairgrounds Administration building. The crowd watched as the bidding reached $9.050 per acre, easily the highest price ever for Van Wert County farmland.
At a time when the local and national economics have been struggling to recover, the agricultural industry has been booming. The average price of Van Wert county farmland hovered around $3,500 per acre in 2006. In November of 2006 a farm in Liberty Township sold at auction for $4,800 per acre. In December of the same year a farm in Harrison Township sold for $5,200 per acre at auction. Since then the value of farm land has been on a steady increase.
Several factors have led to the higher land values. The production of ethanol has increased the demand for corn. The industrial surge in China has increased the demand for meat in their diets which in turn allows them to buy more grain from the United States to feed their livestock. The devaluation of the U.S. dollar in the past few years has made it more economical for other countries such as China to buy our grain.
One of the most influential factors affecting farmland prices is the ratio of supply and demand. The demand has been increasing at a time when the supply has been limited. Another important factor in the dramatic rise in farmland values has been the decline in interest rates.
Currently, interest rates are at historic lows. Borrowers have never been able to obtain loans at such low rates. All of these factors have had an impact on the rising value of farmland over the past five years.