Twenty-four acres in Daviess County recently sold for $14,000 per acre—true or false? It's true! Confirmation came from the auctioneer himself who conducted the sale.
That's only part of the story. A larger tract of farmland in the same county near Washington recently sold for just over $13,000 an acre. Part of that farm was reclaimed mine land. The reclaimed mine land sold for over $8,000 an acre! And according to the auctioneer, this is farmland, not development land.
So there must be a famous Paul Harvey 'rest of the story,' right? Well, sort of. According to the auctioneer and farmers in the area, part of the strong bidding is coming form farmers who are losing land to the I-69 project. Work is currently underway on the new four-lane interstate that will connect Bloomington and Evansville. With Indiana 37 converted to be part of the system, it will technically connect Evansville to Indianapolis.
It might not seem like a farmer would lose much land to an Interstate, but depending on how long it runs through his land, it can be substantial. Wide medians cut a swath through fields. One farmer told Indiana Prairie Farmer he's losing 200 acres to the project. What's worse, it's cutting through two of his better fields, and leaving point rows in two fields. He says he was compensated for the point row situation, but it was a one-time compensation included in the purchase of the land.
What's happening is that farmers who sell land to the Interstate are looking to reinvest it elsewhere, sources say. They need to purchase property so they can do the Exchange allowed by law and avoid paying taxes on land that may have been purchased at low prices originally, giving it a low basis.
The support for land prices is spilling over into other counties as well. One farmer decided prices were just too high in Daviess County, and found a suitable farm at a much lower price, comparatively, in a nearby county. That will let him make his investment and qualify the tax rules. It also makes it harder for a farmer in that county to bid on land, since competition is coming in from outside that county.
One other factor is at work in the Daviess County land sales, sources say. There is a strong Amish presence in the community. While many of them work off the farm, they still want to maintain the farm life for their family. With land scarce, they may be forced to bid and compete for land as well.