Skip to main content

2024 Director Election Vote Now > | Access your account online with Digital Banking Learn More >



Episode 53: Farm Real Estate & Auctions

Farmland and farm equipment are some of the largest purchases that operators take on as they manage their businesses. Understanding the landscape of these markets can help prepare buyers to feel equipped to make important purchasing decisions. In this blog post, Luke Schrader of Schrader Real Estate & Auction Company provides insights into the current and future state of farm real estate, farm equipment and how auctions play a role in both of these markets. 

Farm Real Estate

Among the many factors that play into a farmland purchase decision, possibly the most important is the proximity to the operator’s current location and the sentiment behind purchasing that land. In a farmer’s lifetime, a piece of land will only go up for sale one time (typically). Land is scarce, so if a property bordering theirs goes up for sale, and they are in a positive financial position, there is great motivation to make that sale happen. 

Whether through an auction or an estate, Schrader shares that most farmland transactions–about 75%–are farmer-bought. The financials are much better for farmers operating the land than for investors looking at a 1.5-2% rent structure. 

Current market conditions offer even more support for operators in a position to buy, with consistently low interest rates and strong commodity prices. 

Schrader comments, “As an investment class, farmland continues to appreciate over time in the long run. In general, you look at the historical growth of farmland and it's been a very safe place to put money.”

In terms of what the future of farm real estate looks like, Schrader believes that land will continue to appreciate. As land is needed for development or energy needs, production acres become that much more valuable. 

“And it all goes back to the fundamental essence of, as a world, we need food, we need energy, and we need shelter. And land is the basis for all three of those things, and they're not making any more of it,” explains Schrader. 


Farm Equipment

While farm real estate has weathered economic ups and downs over the past few years, the farm equipment market has experienced more drastic spikes. Equipment production shut down during COVID, which affected inventory. Supply was tight, causing prices to increase dramatically and stay relatively high. 


Schrader notes that there may be some relief for operators looking to purchase in the next 12-24 months, although the farm equipment market is hard to predict. 


“In the last 60 days and maybe even a little bit beyond that, there has been a little bit of a softening in the market. We do see supply catching up.”


Auction Structures and Tips for First-time Buyers

Both farmland and farm equipment are often sold at auction, and while live auctions are still happening, online auctions are becoming very common and take a couple of different formats. Timed online auctions have a ticker countdown and bids take place over the timing of the auction. Virtual auctions have a live auctioneer calling bids, with the bids displayed on screen. Virtual auctions will also sometimes have a live crowd participating. 


From Schrader’s point of view, online auctions offer more flexibility for equipment purchases because they expand the market for each buyer. 


He explains, “The biggest difference between equipment and land is, equipment you can move. There's a lot more occurring digitally because the remote buying is much more feasible on the equipment side versus the land side. You can move that equipment to you.”


On the land side, Schrader’s company offers online bidding for almost all land auctions, but most buyers choose to bid in person. 


He points to value and sentiment as key drivers, “There's no piece of property that's the same as another. There's so much sentiment to it. And you're talking about a much higher capital level on the land side than the equipment side.” 


Schrader gives some helpful advice for anyone that is buying a piece of land for the first time, or attending an auction:

  • Understand the terms of the sale. Most companies will post these ahead of time, so study them before you get to the auction. 

  • For the current year, understand how taxes will be paid.

  • For the following year, understand the farming rights. Is there an existing lease or will you be able to farm it right away?

  • Make sure you know if there is a buyer’s premium and what it is. Understand if that premium fits into your financial situation. 

  • Talk to the auctioneer. Ask questions about how the auction will be conducted so you can build a strategy going in. 


In the end, Schrader says it all comes down to the farm families that are either eager to continue operating, or benefitting from previous generations’ efforts.

“We feel very blessed and privileged to be a part of it.” 

Here’s a glance at this episode:

  • [01:11] Luke introduces himself and provides background on himself and Schrader Real Estate & Auction.

  • [03:21] Luke provides an update on the farm real estate market.

  • [06:30] Luke talks through the economy’s effect on the farm equipment market over the past few years.

  • [07:46] Luke provides some insights into what the future may hold for land and equipment values.

  • [11:58] Luke identifies who is buying most of the farmland and what motivates those purchases. 

  • [16:10] Luke talks through the various auction structures and how each applies to farmland and farm equipment. 

  • [21:06] Luke provides some information on buyer’s premiums and how they’re trending in the market. 

  • [23:04] Luke shares some of the highlights of his experiences in this role and working closely with farm families. 

  • [26:15] Luke closes with some helpful tips for first-time buyers at an auction.


Share questions and topic ideas with us:



Voiceover (00:06):

Welcome to AgCredit Said It! In each episode, our hosts sit down with experts from all parts of the agriculture industry to bring you insights and must-have information on all things from farming to finances and everything in between.


Phil Young (00:27):

We are back for another episode of AgCredit Said It! This is Phil Young hosting today, I'm excited for our guest. We have Luke Schrader, of Schrader Real Estate & Auction Company. He's with us to talk about farm real estate values, farm equipment values, auctions, and what he thinks the future holds. So hopefully you have your magic ball here with you today to kind of see what the future holds, but welcome Luke.


Luke Schrader (00:47):

Yeah, yeah. Thank you, Phil. It's a pleasure to be on here. Enjoy doing work with Ag Credits across different parts of the state. So pleasure to be here and excited to be on.


Phil Young (00:57):

Yeah, welcome. You came from Columbia City, right?


Luke Schrader (00:59):

Yeah, that's correct. About an hour away.


Phil Young (01:01):

Gotcha. Okay. Well, hey, I always like to start off with, we want to learn more about you ...


Luke Schrader (01:05):



Phil Young (01:06):

... your background, how you got started in the industry, and just the company you work for. So share with us a little bit about you.


Luke Schrader (01:11):

Yeah, yeah, You bet. Well, yeah, brief background on myself. I grew up in Northeast Indiana and the Columbia City area. Was around the real estate and auction business throughout a lot of my youth. I enjoyed it, I enjoy agriculture and being around it. I went to college at Oklahoma State, left home there for a little bit, and then I worked for Tyson Foods in Fort Worth for a little while before coming back home. Really enjoy what we're doing now. Feel very, very blessed with the team we have at Schrader Real Estate & Auction. We've got a lot of really good personnel and people that are just looking to make things happen, so feel very fortunate with where we're at as a company. Our company's been around since 1944, so we're celebrating 80 years this year ...


Phil Young (01:51):



Luke Schrader (01:51):

... which is very crazy to think about, but thankful for the history and also thankful for the team we got today.


Phil Young (01:58):

It's a pretty sizable company. How many employees are with Schraders, do you think, ballpark?


Luke Schrader (02:03):

Yeah, we got about probably around 70-75 folks, and that's a mix of employees versus independent contractors and part-time folks. But our team as a whole is around that 75 mark.


Phil Young (02:12):

And your scope of businesses, I mean, it stretches pretty far, right?


Luke Schrader (02:16):

Sure, yeah. Over the past two years, I think we've conducted auctions anywhere from California to Virginia, so we run coast to coast, but northeast Indiana and northwest Ohio are kind of our backyard. That's where we do a majority of our transactions.


Phil Young (02:31):

Okay, and so I'm curious, you said you went to school in Oklahoma. How'd you end up out there?


Luke Schrader (02:36):

Yeah, I knew I wanted to go out west. I enjoyed the area out there. Oklahoma State had a really good ag business program and I saw it as an opportunity to meet some more folks and network. And our company had a branch in Stillwater. We've got an auction manager down there that does a lot of work as well. Oklahoma's probably our next biggest state out of Indiana and Ohio. And so that gave me a good opportunity to do some internships while I was going through school.


Phil Young (03:01):

Nice. Well, real estate values around here have been a hot topic.


Luke Schrader (03:05):



Phil Young (03:06):

There's been a lot of land in just Danworth County in northwest Ohio, north central Ohio. It's been a booming economy here for farm real estate. I guess what have you seen elsewhere in Indiana and in Ohio? What's happening with farm real estate?


Luke Schrader (03:21):

Sure. Yeah, it's an interesting time. There's no doubt about that. And probably the most interesting standpoint is, 24 months ago when interest rates were really, really low, commodity prices were high. The land boom I think was logical for a lot of people as they observed it. This makes sense. There's a lot of money available. Incomes are really, really good, and land is seen as a very good investment.



And so probably the most interesting part about the last 10 to 12 months has been all of a sudden there's some headwinds in the market. Interest rates have gone up a little bit. Commodity prices decreased some, but yet we've still seen very, very strong land values. We don't sit here today and say that we've seen any type of dip over the last six months versus the last 12 to 18. And it goes back to how land is viewed as one, of scarcity, and two, as an investment for the local operator.



Most of them only have one opportunity to buy a specific farm. That farmer's only going to sell once in their lifetime. Most of us are not going to see the same farm sell twice in the nature of farmland transactions. And then as an investment class, farmland continues to appreciate over time in the long run. It’s always impossible to tell in the short run what something's going to do. And obviously nobody has a crystal ball for what forever looks like, but in general, you look at the historical growth of farmland and it's been a very safe place to put money.


Phil Young (04:56):

Has it been this way everywhere you think as far as increased values, that upward pressure on sales and just the amount of land selling? Has that been pretty consistent everywhere?


Luke Schrader (05:08):

Yeah, I'd say in general. We did some deals in Texas here in the last six months, so looking recently over the last six months, anywhere from Texas to Ohio, land has been selling relatively strong for each region. Now there's certainly some regions that have had less land on the market in the last two years, and maybe we're seeing stronger sales there because there's been more cash that hasn't been spent, per se. Some regions have had a lot of land on the market, and so values maybe aren't quite as strong, but still relatively over a two to three year period, there has not been any region that we look at and say, boy, that's just been very, very, very soft.


Phil Young (05:54):

Interesting. Okay. And then the other thing you guys do a lot of is equipment auctions...


Luke Schrader (05:58):



Phil Young (05:58):

... and just selling equipment.


Luke Schrader (06:00):

Yeah, that's an interesting market right now.


Phil Young (06:02):

Yeah, right. Yeah. So 2020 happened, COVID happened. Obviously that just seemed like equipment values or equipment inventory shot down, their production stopped. And so it was just this cocktail of things with the economy shutting down, less new equipment out there, and maybe less buying. And then we kind of surged here. So I guess what have you seen since really, COVID, as kind of that marker in my history index of that's where we saw some craziness start?


Luke Schrader (06:27):

Yeah, yeah.


Phil Young (06:28):

What's happened, I guess since 2020 in your mind?


Luke Schrader (06:30):

The farm equipment market has been a hot topic and reasonably so. Like you said, after COVID we saw a drastic spike and a lot of that was due to, as you mentioned, the tightening of supply. And again, money was cheap and there were good incomes. And so you combine those two things and there was some very, very strong prices, but we will say, in the last 60 days and maybe even a little bit beyond that, there has been a little bit of a softening in the market. We do see supply catching up.



Now, with that being said, the price of new equipment has risen drastically. So late model equipment that is low-houred, that is in very good condition, still selling really, really well. But in general, the farm equipment market has been softening a little bit, specifically in the heavy trucking and semis, combine market's been softening, and a lot of that is due to just supply catching back up.


Phil Young (07:30):

Gotcha. Okay. Now, I noticed you brought your bowling ball bag with you. I think you have your crystal ball in there.


Luke Schrader (07:35):

I wish.


Phil Young (07:37):

What do you think - obviously no one knows the answer to this, but what do you see happening in the future for farm real estate? For farm equipment? As far as values?


Luke Schrader (07:46):

Now, if I had a crystal ball, I'd be, I'd be running all over the place telling people, giving testimonies on exactly what's going to happen. So we wish we had that. We'd be able to do our clients a lot more good if we had the crystal ball. Obviously nobody knows for sure what's going to happen. Be transparent. The farm equipment over the course of the next 12 to twenty-four months, that's a harder thing to put a pulse on and to stand behind with certainty. We can say the land market - it's interesting going back all the way to the housing crash, right in 2008, 2009 -  really the farmland market has never been the same since then.



When that crash happened and stock market values went down, residential values went down, farmland stayed steady. It maybe was not near as stout as what we see today, relatively, but even when you had all these other things in the general economy going backwards, farmland remains strong.



And ever since then, people have viewed it as such a safe investment class. Even if incomes come down a little bit, even if interest rates stay at the level they are, which really some people talk about interest rates spiking. Well over the long run interest rates are at a pretty reasonable level. To some people it seemed high coming off of 3-4%, but really we're at a pretty reasonable level when you look at the history of interest rates.



We don't see land as something that's going to soften, and we certainly believe in the long run land's going to continue to appreciate. And it all goes back to the fundamental essence of, as a world, we need food, we need energy, and we need shelter. And land is the basis for all three of those things, and they're not making any more of it.



We're becoming more efficient with the land we have, but they're not making more of it. And to create more shelter for the growing population, we're taking acres out of production. To help out with the energy needs, we're taking some acres out of production. And so I'm certainly not here to say what's right or wrong, but I am here to say we continue to see a need for development. Obviously as things grow, there is a need and a push by the current administration for energy. And so with that, your productive acres that are still in production become that much more valuable. And that's something to note too. There is a lot of alternative, specifically as it correlates to land values. There is a lot of alternative capitalization going on in the economy.  You take nearby cities of Columbus and Fort Wayne, there's a lot of development.



Well, what are they developing on farmland? And so when you have these developments happening that is putting cash in operator's pockets, and then they're going out and looking to buy more land. So the 1031 market is keeping land values really strong, I think is going to continue to do so. And then also the alternative energy markets, whether it's solar, or regardless of what kind of energy you're looking at, that is infusing some cash that ends up getting put back into the agriculture economy as well. Those operators are taking, whether it's, for example, again, solar lease or a solar buyout, they're going to turn around and try to go buy more productive acres. And so that is a compounding effect that continues to put more cash in the ag market that I don't see, we don't see, a slowdown in the near future.


Phil Young (11:28):

And you guys have a bigger sense here as far as buying and selling. Who's buying? Are you seeing more investors, landlords selling real estate property right now, and then obviously operators buying? Is it a mix of both as far as investors, operators buying farm ground? You hear headlines obviously out west Bill Gates is buying up thousands of acres. I don't know that we feel that here so much, but do you get a sense it's investors buying or more operators buying?


Luke Schrader (11:58):

Yeah, that's always a hot question. Obviously given a lot of the headlines and the headlines get a lot of the attention, but really we still believe it's an operator-based market in today's conditions, say there's a recent report put out, where around 75% of farmland transactions were still farmer-bought. So the majority of farmland being bought statistically seems to still be farming families, getting those bought, even though those aren't the big headlines. And specifically as it correlates to values, it goes back to what I talked about at the beginning of this, for farmers, location matters to them if it borders them, if it is in the area of which they operate, there's only so much to that. And so when something becomes available, we see farmers tending, and your operators paying, more of a premium than what your investors will. For a lot of your investors, location doesn't quite matter as much, and there's not as much emotion behind it.



They're looking for a rate of return and they're not going to go pay $15,000 an acre for a farm and rent it for 250 bucks an acre and get a whole lot back. And those are kind of some random numbers. Obviously that cap rate on the rent side varies where you go. Those are generally speaking numbers, but to your investor, when there's alternative investment vehicles out there, when you can go to the bank and get 5.5% guaranteed, that makes a lot more sense to a lot of folks that it's hard for them to pencil buy a farm and only getting cash return of 1.5% to 2% in today's world on what a rent structure might be.



And so we still believe it's an operator driven market on the buy side, farmers are buying most of the land. The sell side is a little bit different I would say. We don't see a whole lot of farmers selling on a public transaction scale. Now, there might be a farming estate that sells, but a lot of times the operators, when they're looking to retire, they're renting the farm to friends or trusted business associates. Obviously, we sell a lot of estates where you might have five kids inherit this farm. Well, it's tough to divide up land. Cash is pretty simple. If you've got a million dollars, you’ve got to divide it five ways. That comes out pretty easy. Whereas 200 acres, you try to divide that five ways, well, none of that's going to be exactly the same. No 40 acres is going to be the same as the other 40 acres.



So a lot of the land that sells obviously is driven through estates. But what we do see some investors that maybe bought 10, 15 years ago, they're looking at the market and they're saying, "It's time for us to cash in." And some of them are reinvesting that money in farmland markets where they believe that there's still quite a bit of upside. They may be taking that cash and going to put it somewhere else. But we do see investors in a hot market if they bought 10 to 15 years ago, those returns look pretty good on an appreciation level.


Phil Young (15:17):

And the operators I've seen selling are really not selling. I think you mentioned this, doing more 1031 type stuff.


Luke Schrader (15:23):

Yeah, yeah. It's-


Phil Young (15:24):

It's a lot of swapping more recently than late.


Luke Schrader (15:27):

Yeah, I don't want to say there's no operator selling. There's transactions out there happening. But I do definitely agree with that. When an operator sells, they're looking to reinvest it. They made their living off of land and they believe in it, and during the portion of their life, they're generally looking to continue to acquire.


Phil Young (15:44):

I want to shift gears and talk about just auctions in general, structure, types. Sure thing. One thing that's kind of a hot topic, when you look at real estate auctions and equipment auctions specifically, is this online stuff, equipment specifically? I mean, there's some high-dollar equipment out there people don't see or even lay their hands on are bidding on this stuff. Is that growing? Is that something you're seeing a lot of?


Luke Schrader (16:10):

Yeah, I would say on the equipment side, there's no doubt that it's growing. And you can look at a couple different tokens. You're kind of two kind of online sales: you have it timed online or there's just a ticker countdown and you're looking at a computer screen and you're just bidding based on the timing of it. That's where the timed online comes in. And then you also have virtual, which is becoming extremely popular, where you still have a live auctioneer calling bids, but those bids are displayed on a screen. It's happening from a studio. We don't always necessarily have a live crowd. We can. But don't necessarily always have a live crowd. Items are located in different regions and people are bidding online to the tune of a live auctioneer.



It's kind of a combo of both worlds. That's worked out really good for our business structure and plan, but even when we have live auctions, we see live on site auctions, there's still a decent amount of equipment being bought online.



And the biggest difference between equipment and land is, equipment you can move. So I can be located in South Dakota, buy a good tractor from Indiana and Ohio, and economically get it to myself. So that is where I think the equipment market is much more fluid and is happening. There's a lot more occurring digitally because the remote buying is much more feasible on the equipment side versus the land side. You can move that equipment to you.



And so we do see a lot of equipment transactions happening digitally, but we still offer a lot of our auctions in a live setting because there's still some folks that like to show up and bid. So our general plan is, we're going to offer people both, let them decide what they prefer. I don't know if that's the right or wrong decision, but that's what we've pursued.



On the land side, we offer online bidding at basically all of our land auctions. We still see well over 99% of buyers showing up to bid in person. And a lot of people have asked us, "Well, why haven't you gotten to online land auctions?" There's a lot of different regions of the country where that's the case. Majority of public auctions are held online. In our minds, if people are going to continue to show up, well then that's their preference. If they're choosing to show up, if we are getting that good of a live attendance at a land auction, then we're going to continue to provide that option as long as that appears to be what the customer is searching out. And land just has, again, there's so much sentiment to it.



There's no piece of property that's the same as another. A lot of people, if they've been driving by that 40 acres their whole life and it comes up for sale, that's their only chance to get it bought. And so I think the live interaction goes along way with that. And generally speaking, you're talking about a much higher capital level on the land side than the equipment side. It's kind of crazy to think that a new combine might buy you 80 acres too in some settings, but generally speaking, the land side is still happening much more commonly in person and the amount of people buying in person on the land side as well is in the high 90% range.


Phil Young (19:36):

And I think the market will drive that, right? As far as, unless if you guys put on a live auction and no one shows up-


Luke Schrader (19:42):



Phil Young (19:43):

... it's like, well, it seems like online only is the way to go, but you guys still have people showing up. It's like, well, there's a market out there that still demands that.


Luke Schrader (19:50):

Yeah, yeah, absolutely.


Phil Young (19:51):

It doesn't make sense to shut off that faucet.


Luke Schrader (19:53):



Phil Young (19:54):

And it seems to me the comfort level of people bidding online with equipment two, three years ago when supply was low, people were forced to stretch their goggles, I guess, a little bit further out to buy equipment because they just needed it. I need this piece and the only thing that's available is three states away, and I got to bid on it online. And I think the comfort level of people just got there. There seems like they just got there faster and they're like, well, this is what I got to do. So everyone just kind of got in the mix of buying online a little bit more.


Luke Schrader (20:26):

And that'd be an interesting statistic study. I'm sure it's out there. We haven't ran our own internal research on, what percentage of your larger equipment items, whether it's tractors, tillage, harvest equipment, what percent of that is selling within a five-county radius versus out of state? That'd be interesting to look into now that you say that. But we do notice, as you mentioned, a lot of those items are, it's not uncommon to be sending it across the country and Canada, certainly not a couple states away.


Phil Young (20:55):

A hot topic I get asked about on Real Estate Auction is a buyer's premium. I don't know if you get asked this a lot, but-


Luke Schrader (21:02):



Phil Young (21:03):

What is a buyer's premium? And you see that maybe penetrating the market more or less?


Luke Schrader (21:06):

Yeah, yeah. No, that's a great question. That is a hot topic, no doubt. I do think if you look at agricultural transactions in different parts of the country, the eastern Corn Belt and the I States are one of the last areas to really adapt the buyer's premium. It's not something that we necessarily want to push as an auction company. We want buyers to look forward to an auction, but there are times where it's requested by clients. You get down into Georgia and the Delta areas, you see a lot of 10% buyer's premiums no matter the size of the farm. You get out west and you see more buyer's premiums in those regions. It's just kind of accepted.



But what we do tell folks is whether there's a buyer's premium or not, people are going to be factoring that in. We're not blind to the fact that, if there's a 2% buyer's premium, most people are going to be sitting there penciling, okay, well, what am I actually going to pay? We commonly tell folks, it's going to be counted in somewhere. It just matters how you want to go about it. But the only reason I say that the buyer's premium could become more common. It's just because in other regions of the country, it is much further ahead than where it's at regionally to northeast Indiana and northwest Ohio.


Phil Young (22:32):

Well, I'm curious, you've been doing this for a few years and any good stories from the road, I guess, anything you want to share as far as maybe interactions with people or just sales that have happened? Anything that sticks out in your mind?


Luke Schrader (22:46):

Yeah, definitely. It's tough to put a pencil on one because that's what we're most fortunate to be able to do, is to come across so many families that have neat stories, and we come across so many neat outcomes and just family history.



So I wouldn't say there's one story in specific, but generally speaking, the neatest thing for us when we get done with a project is, take an estate with five siblings. They watch their parents build up that farm for a lot of years and put a lot of work and effort into that. And to see the fruit of that capitalized in a way that makes all family members happy and grateful, those are really neat stories to walk away from. A lot of these farms that we're selling today might've been bought for tremendously less.



These farming families never would've guessed what land would be worth today. And so it's always neat for them to see the fruit of previous generation's efforts and also on the farms that continue to be farmed. It's not always on what we get to sell, but who we get to come across. The farms that have made it six, seven generations. Those are really, really neat things to observe and to see the continued hunger down the family line to keep operating. So I'd say both sides of that coin are privileged. We feel very blessed and privileged to be a part of.


Phil Young (24:17):

Nice. I always like to ask this question for different industries. When I’m out and about and people ask what I do for a living, I'm always like, "I'm a lender." And then there's always these common funny questions I get asked when you're out and about and you meet somebody and you're like, "I'm in real estate. I'm in auctions." What are some misconceptions you hear a lot about your industry, what you do, or just interesting questions you get asked when you're out there?


Luke Schrader (24:43):

Yeah, that's a good question. And I think a lot of people, when they look at an auction, they envision the day of, the event itself, which really is only about an hour and a half. Auction could be anywhere from 30 minutes to five hours depending on the size of the transaction. And so a lot of people, that's all they see and that's all they envision. And the question we always get asked is, "Oh, so you can talk fast." I mean, that's just what we get stereotyped as.



And so it's always kind of fun to talk them through, okay, this is all the behind the scenes work that leads up to it. Really, from the time that we normally get introduced to a client to the time an auction happens is at least eight weeks, and sometimes there's six months worth of work that goes into a two-hour timeframe, and that family spent a lifetime building up something that everybody observes being sold in a two-hour span. And so the amount of things beneath the surface that occurs that go into them, it's always fun to kind of talk people through that process.


Phil Young (25:46):

Yeah, yeah. People always probably want you to perform talking fast.


Luke Schrader (25:49):

Yeah, that's right. That's right.


Phil Young (25:53):

I guess one of the reasons we created this podcast was to educate young borrowers, young farmers, getting into it. Any tips or advice for somebody who's not bought a piece of farm ground or hasn't done an auction before, they're getting ready to do this for the first time from your side of the table? Any tips or advice you give them if they're going out trying to buy their first piece of farm ground or equipment at an auction?


Luke Schrader (26:15):

Yeah. For a buyer on the real estate side, certainly understanding the terms of the sale. I mean, a lot of people tend to just kind of show up and try to skim through things right before the sale. Most auction companies are going to post the terms of the sale ahead of time. And so we always encourage people to study those. How are the taxes going to get paid for this year? The biggest one is, what are the farming rights for the following year? If you're buying this, you're going to want to obviously understand whether you can operate it right away or if there's an existing lease that takes another year to occur. So those are always important things. And we talked about earlier, buyer's premium. If you are on a strict financial schedule on what you are willing to spend, make sure you understand whether there's a buyer's premium or not and have a good foundation for those variables going into it.



And talk to the auctioneer. That's a big thing. A lot of people say, "Well, I'm better off hiding in the dark." There's enough people that talk to us through the course of a transaction. We just want to help people be informed, talk them out. So regardless of whether it's us or another auction company, we always just encourage people, call them, talk to them, learn the process, and understand how it's going to be conducted. There's different types of auctions. You have bidder's choice, you have multi-track, but understanding how that auction is going to be conducted can help you build a strategy going into it. If you're looking at buying anywhere from 40 acres to 500 acres.


Phil Young (27:45):

Good. Yeah, just always being willing to ask questions is the big thing.


Luke Schrader (27:48):

That's right. That's right. There's no bad questions.


Phil Young (27:50):

Yeah, there's no bad question, but well, anything. Looking at 2024, anything in the auction industry, real estate equipment industry, any big changes coming in the industry you think in 2024 or anything you want to highlight at all?


Luke Schrader (28:05):

No, and that's the most exciting thing about the auction industry is it's the most painful part, is not having a crystal ball and not knowing. But it may be the most exciting is that the purpose of having an auction is to find out what the value is. We believe that that's one of the best ways in a competitive atmosphere in today's market to figure out - whether it's a tractor or a hundred acres of tillable land or 20 acres of woods - auctions can help figure out what the value of things are. So I don't want to sit here and say if there's any major changes we see coming to the auction industry, but it will be fascinating,  given the different economic variables on a macro level, as well as the agriculture specific level to see what the price of different things are going forward.


Phil Young (28:55):

Thank you for joining us, Luke.


Luke Schrader (28:56):

Yeah, you bet. Thanks for having me on Phil. It's been a pleasure. Appreciate it.


Phil Young (28:59):

Yep. Appreciate you driving over from Columbia City.


Luke Schrader (29:01):

Yeah, happy to do it.


Phil Young (29:02):

All right guys. Remember to check out our previous episodes of AgCredit Said It! online and we'll be back soon for another episode where we sit down with Steve Reinhardt, who is the president of the United Soybean Board. All right guys, see you then.


Voiceover (29:17):

Thank you for listening to AgCredit Said It! Be sure to subscribe so you never miss an episode. While you are there, leave us a review to help others find the show. Let's talk ag in between episodes. Follow us on Facebook, Twitter, and Instagram at Ag Credit. For more tips and resources, visit