TEKAMAH, Neb. — Now the cost of the Missouri River flood of 2011 is less murky.
Millions of dollars in land values were washed away by the unprecedented flooding.
A non-irrigated, riverside farm that survived calamities over a century, only to drown in the flood, was sold to three Tekamah-area farmers at auction Saturday. They paid a combined $2.4 million — or roughly 52 percent less than what it might have generated with no damage.
The sale of the 620-acre Beaver Farms north of Omaha gave neighbors and other floodplain landowners in eastern Nebraska and western Iowa an indication of the value of their flood-damaged cropland. A majority of the farm's rich topsoil was smothered by sand left behind by a summer of floodwater two years ago.
The farm sold for about $2.6 million less than undamaged land would have received, based on the price paid for a top-producing, flood-free corner of the farm.
“It's like you signed your deed over to nobody,'' Ron Dierking of Scribner, Neb., said of the financial loss suffered by flooded-out farmers. Dierking sat in on the auction out of curiosity.
Still, the sellers were pleased and auctioneers were surprised at how much was paid for cropland that will require about $1 million to be cleared of sand.
“We're all happy with the way it went,'' said Elinor Beaver, 87, of Tekamah, whose late husband's parents built a two-story house on the farm in 1918. Those settlers were descendants of Nebraska Territory pioneers whose land grant was signed by President Abraham Lincoln.
“The price people pay for land!'' Elinor Beaver said. “It's almost ridiculous.''
Land broker Jack Nitz, founder of a Fremont auction company that bears his name, said he didn't expect two tracts heavily damaged by floodwater to sell for as much as they did.
Tekamah farmer Kevin Brummond paid $3,050 per acre for a 163-acre tract and $2,600 per acre for a 299-acre parcel of cropland, both largely covered with sand. Some drifts are 5 feet deep.
Brummond said it may cost him $3,000 to $4,000 more per acre to clear the land and put it back into production.
“It's too good of a farm to let it sit,'' he said.
Lonnie Elliott of Tekamah, who farmed Beaver Farms as a tenant for 42 years, bought a 119-acre tract for $6,600 an acre. Sand covers about 15 percent of the parcel.
Elliott said the Beaver family's financial loss is clear. A 40-acre parcel of top-producing cropland that wasn't flooded sold for $8,100 an acre. A nearby tract that took the brunt of the flood damage sold for $2,600 an acre.
“Had the family sold that ground prior to the flood, then the whole farm would have sold in that $7,000 to $8,000 range,'' he said. “They took the biggest hit in the county because the farm was so large and had so much damage.''
The total sale price equates to $3,852 an acre across the farm's damaged and undamaged cropland.
That compares with an average $5,800 per acre value for northeast Nebraska farmland with irrigation potential, according to the 2012 University of Nebraska-Lincoln Farm Real Estate Market Survey.
Across the river in west-central Iowa, the value of similar high-grade cropland averaged $11,128 per acre last year, according to an Iowa State University survey.
Last spring — one year after the flood — a big bite of Beaver Farms resembled a desert wasteland. Waves of sand dunes averaging 3 feet deep covered nearly 300 acres. Deep dunes remain.
The family decided to sell.
“We just didn't have the wherewithal to remove all the sand and make it farmable again,'' said Jim Beaver of rural Blair.
Beaver, 52, is a grandson of the last family members to actively farm the land.
“It came to a family vote, and we decided that an auction was the best way to get it into the hands of someone who could make the land viable as a farm,'' he said.
Beaver Farms represented a fraction of the nearly 19,000 acres of Burt County farmland flooded two years ago. Locals estimated that 1,000 acres of the flooded land probably will never be farmed again.
The auction at Tekamah's Depression-era City Auditorium attracted a standing-room-only crowd of about 130 people who mixed chatter with kolaches and coffee. Corn caps and Carhartt coats dominated the crowd. Bid numbers poked out of the pockets of the bib overall bunch.
Most were there out of curiosity, wondering what flood-damaged land is worth. Some of the county's largest landowners attended. The 24 registered bidders came from as far away as Pierce, Neb., and Carroll, Iowa.
Auctioneer Jay Nitz sold each tract individually. He tried to open bidding on the 40-acre undamaged parcel at $7,500 an acre. He finally got a bite at $5,000 and closed bidding at $8,000 before moving on to other tracts.
After completing bidding on the four parcels, Nitz called a recess to allow bidders and others to plan their strategy for the final round.
High bidders during the initial round also came out on top at the end, but they paid more to keep their parcels.
Cousins Clark Lipps and Tom Lipps of Tekamah paid $4,000 more to keep their bid No. 1 on the 40-acre tract.
Elliott paid nearly $119,000 more to keep hold of the 119-acre parcel.
Brummond paid $223,000 more to retain the two sand-covered tracts.
Jack Nitz said the sale established the true value of the farm's flood-damaged and undamaged cropland.
“Everybody knows what the good ground is kind of worth, but they all wondered about the sand ground because there's nothing to compare to,” he said. “Now you've got something to compare to.''
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It's hard to compare farmland values
Comparing farmland values is not an exact science because soil types can differ across neighboring farms, said Lary Clark, owner of Loess Hills Real Estate in Missouri Valley, Iowa.
The Missouri River flood of 2011 didn't affect all Iowa farmland the same. Some fields produced better crop yields last year than they did before the flood; others were worse.
Clark auctioned two Iowa river-bottom farms along the Missouri in November. Neither was flooded, but both were near floodwater. One farm, across the river from Tekamah, Neb., sold for $9,000 per acre. The other sold for $7,400 per acre.
Potential land buyers aren't shying away from farmland simply because it flooded two years ago, Clark said.
"Enough farmers are looking for land to buy — even if it was underwater and didn't produce well last year — that there's always someone who will take a chance on it,'' he said.
Bidders factor in the estimated cost of bringing in scrapers and bulldozers to remove sand and level the land before determining how much they can afford to pay.
— David Hendee