Lake County farmland sold at auction for $10.4 million this week, a signal that demand remains high in spite of rising prices.
Schrader Real Estate and Auction Co., which is based in Columbia City, Ind., auctioned 1,739 acres of farmland that was spread across central and south Lake County. A single investor bought a lion's share of 1,454.5 acres for $8.8 million.
"We weren't surprised to see strong investor interest, because investors haven't had that many opportunities to buy larger properties," said R.D. Schrader, president of the auction company that marketed and auctioned the property. "The tracts making up the 732 acres of the most productive land averaged $8,277 per acre."
Investors typically rent the land to tenant farmers, spokesman Carl Carter said. That business has become more lucrative because of higher corn and soybean prices. Purdue University estimates cash rents increased by between 9.4 percent to 10.9 percent across the state.
Schrader auctioned 24 tracts of land that spread across the Lowell, Crown Point and St. John area. The total amount for sale was significant, since the average farm in Indiana is about 242 acres, according to the most recent U.S. Department of Agriculture census of agriculture.
Such large amounts of farmland are rarely available in the Northwest Indiana market, Carter said.
"It was substantially bigger than most sales in the area have been lately," he said. "It was a good substantial sale."
Interest was keen. Nearly 90 bidders registered, and the bidding was highly competitive. The most productive land was most highly sought after.
"One sign of a healthy market for farmland is that bidders and thinking long-term relative to their investments," he said.
The average price of top-quality farmland in Northwest Indiana rose by 17.3 percent last year. People may mainly think of Lake County as a highly urbanized place, but the county still has more than 440 farms spread across more than 128,000 acres, according to the U.S. Department of Agriculture.