As Family Farms Fade, This Industry Booms

As Family Farms Fade, This Industry Booms

The final bid for this prime Iowa farmland: more than $1 million.

SourceJuliette Michel / Getty
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Why you should care

Family-owned auction houses may be going the way of family-owned farms.

Jason Smith and Martha Boyle have a fair amount in common. Both run ag-centric auction and real estate businesses and call the rolling plains of northwest Iowa home. Their offices, separated by about 70 miles, are in tiny towns surrounded by some of the continent’s most productive farmland. When they’re not orchestrating sales, Smith and Boyle spend much of their workdays behind the wheels of big pickups. Eloquent, forthcoming and opinionated, these two professional fast talkers are also a reporter’s dream.

The similarities end right there. For starters, Smith pushes a Chevy, while Boyle drives a Ford. Smith, an ex-cop who comes from a long line of law-enforcement officers, only entered the auction business a decade ago. Boyle, a fourth-generation bid caller, grew up in the business. More significantly, they occupy opposite ends of the auctioneering spectrum and illustrate the evolution of the industry. With its slick branding, multistate presence and tech savvy, Smith’s firm, DreamDirt, exemplifies the new way of doing business in this corner of the country. By Boyle’s own admission, her family business, the McGuire Auction Company, is a dying breed. “There are very few McGuires left,” Boyle says. “The auctioneers aren’t as multifaceted as they once were. The young guys want to do online bidding. They don’t want to sell furniture or pots and pans. It’s a more pinpoint method.”

I hear it all the time — ‘These megafarms are trying to kill us’ — but everything is getting bigger.

Jason Smith, auctioneer, DreamDirt

DreamDirt, which exclusively trades in “dirt and iron,” is a prime example. According to Smith, DreamDirt broke new ground when it introduced online bidding for Iowa farmland auctions in 2012 and when it launched a smartphone app two years later. The tech-centric approach doesn’t end there. Smith also blogs frequently at dreamdirt.com, and he pioneered the practice of listing land sale prices on his other website, dollarsanddirt.com.

When it comes to live sales and staff size, Smith’s team of 13 — auctioneers, farmland real estate agents and a machinery specialist — are a stark contrast to Boyle’s much smaller, family-only operation. Big, out-of-state outfits like Illinois-based Sullivan Auctioneers (30-plus employees) and the Steffes Group (six locations in four states) are two more exemplars of the new wave in Iowa auctioning.

Then there’s Hertz Farm Management, which has 15 offices spread across the Corn Belt, including eight in Iowa, and deals solely in land auctions. “It’s a perception that there are some bigger firms handling more auctions, but it really depends what they’re handling,” says Kyle Hansen, a Realtor-cum-auctioneer who works in Hertz’s home office in Nevada, Iowa. “There are a lot of small auctioneers doing well in their local markets. Bigger companies like Hertz are specializing in a certain market — we don’t do machinery or livestock— and cover a lot of area.”

As the co-owner of the World Wide College of Auctioneering in Mason City and a seasoned bid caller with four decades of experience on the mic, Paul C. Behr knows a thing or two about the auction business. Ask him — or any other auctioneer, for that matter — what makes auctions special, and they’ll all tell you the same thing: It’s the purest form of sales and marketing. It establishes a date for the sale and compels a decision at the appointed hour. “The auction is the first method of choice for selling,” Behr says. “It’s not an accident that the highest price you can achieve in marketing — whether it’s Sotheby’s for piece of art, Keeneland for a horse or farmland in Iowa — is through bidding at an auction.”

But Behr, a native Iowan who now resides in Colorado, says auctioneering is more than just tongue twisters and high prices. The auctioneer’s office is a Main Street fixture in farm country. When auctioneers are not calling bids or organizing the next sale, you’re likely to find them helping out at the county fair, or lending their unique skill set to a local charity auction. Simply put, “the auctioneer, in a rural America, is a pillar of the community,” according to Behr.

Auctioneers in Iowa aren’t licensed, and many operate as contract part-timers, so getting precise data on the number of bid callers and auction companies in the state is difficult. (According to the searchable Find an Auctioneer database on its website, the Iowa Auctioneers Association has more than 300 members.) Conversations with several auctioneers and industry experts, though, revealed a definite trend toward consolidation, franchising and bigger company footprints.

According to Shane Ellis, who keenly observes the auction business as a livestock economist for the Iowa State University Extension, “you’re certainly not seeing a growing number” of family-owned, local auction operations in Iowa. That said, he’s not prepared to ring the death knell, noting that well-respected and established firms like Boyle’s McGuire Auction Company still play an important role in the rural Iowa economy. “They’re still going strong,” Ellis says. “They’re not going to go away anytime soon. I think they will maintain a good market hold for decades to come in the small areas where they work.”

In a way, the evolution of the auction industry mirrors a broader trend of consolidation in Iowa agriculture. In February, the U.S. Department of Agriculture reported that the number of farms in Iowa in 2016 was around 87,000. In 2007, that number stood at 92,800. At the same time, the average per-farm acreage has grown 6 percent.

“I hear it all the time — ‘These megafarms are trying to kill us’ — but everything is getting bigger,” DreamDirt’s Smith says. “Even auction companies. It’s really, really hard for a small auction company to survive and compete in this world.”

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