KOKOMO, Ind. (AP) - All eyes in the room were on Mike Spangler when he shook his head "no."
At $1.55 million, he was out.
And with that, Brad Winger was the new owner of 156 acres in Liberty Township.
At nearly $10,000 an acre, the winner of Tuesday's farm auction wasn't sure he won and the loser wasn't sure he lost.
"How would you feel if you just dropped a million and a half dollars? My heart about fell out of my chest," Brad Winger said of the moment the Spanglers dropped out of the bidding.
"You don't want to give too much because five years from now, the land could be worth what it is now," Spangler told the Kokomo Tribune (http://bit.ly/1gpXL1P ), trying to be philosophical about the bidding war. "When ground gets this high, you can't buy every farm that comes up for sale."
Around 80 people packed the room at the Kokomo Shrine Club Tuesday, some there to bid, others there, as Halderman Real Estate Services area representative John Miner said, "to get free appraisals on their land."
With crop acreage near a record high, and corn prices expected to fall this year, there was some hope that Tuesday's auction would answer a few questions.
Would the sale price point toward a softening of land prices, or the opposite? Would the sale attract multiple investors from out of the community, or would the bidding take place between locals?
It was a microeconomic version of a macroeconomic trend, one which has both elated and concerned farmers.
Citing USDA figures, Bloomberg reported farmland values nationwide have increased by 72 percent over the last three years, leaving farmers concerned about a bubble market.
This year, the USDA is predicting the amount of money farmers will receive from crop sales will decrease about 12 percent. Farmland could lose 30 percent of its value in the next three years as the corn rush ends, Gary Ash, chief executive officer for 1st Farm Credit Services in Normal, Ill., told Bloomberg recently.
Even so, Miner said farms with good soil haven't seen any decline.
"In fact, we're not seeing much of a decline in anything," Miner said.
The wild card of the evening, Chicago investor Fletcher Durbin, was the guy in the room no one knew, apart from the auctioneers.
Friendly and relaxed, wearing a fishing vest and blue jeans, Durbin dropped out when the price reached $1.35 million.
"The investor might be the guy who runs (the bids) up, but the farmer is usually the one who ends up with it," Miner predicted prior to the start of bidding.
For the first 20 minutes of the auction, it was the out-of-state investor making waves
"What do you do with cash?" asked Durbin, who owns a house in Peru. "The nice thing about farm land is that the return is real. You buy a financial asset, you might get cash, but who knows what you've got? You might have something good, or you might be buying Enron. But the land is the land."
When it became apparent the sale would probably net close to $10,000 an acre, Durbin quit bidding.
From that point on, it was the Spanglers versus the Wingers.
To say the families know each other is an understatement. The patriarchs of the families, Don Winger and Charles Spangler, were both present Tuesday, but their sons were doing the bidding.
The families both attend Kokomo Zion United Methodist Church and both families have land adjoining the auction property.
"The ones that bought it were the ones we figured would buy it," Spangler said.
The auction property, listed as the Ammerman-Harris property, had been in the same family for generations, but both the Spanglers and the Wingers thought it hadn't been farmed by anyone in that family since Don Winger and Charles Spangler, now both in their 80s, were young men.
The Wingers have been renting the land, which sits about three miles north of Greentown, for close to 30 years, Brad Winger said, so it made sense to try to buy it.
"We didn't want to lose it. It's within a mile of our home, and it's also right next to the Spanglers," Brad Winger said. "It's hard, because you're bidding against someone you see all the time in the community. I know I'd rather (the Spanglers) had it than someone from out of town."
Farmers pay close attention to soil quality and yields and auction houses like the Wabash-based Haldermans usually list the specific types of soils geologists have recorded on the particular property. For at least the past year, tillable acres with good soil quality in the Corn Belt have been going for more than $10,000 an acre.
The day after the auction, the Schrader auction house announced an Illinois property with prime soils sold for an average of more than $14,000 an acre.
The Ammerman-Harris property contained 143 tillable acres and 10 acres of woods. When the value of the woods was subtracted from the total, the acres suitable for growing crops averaged just under $10,600 an acre.
For Durbin, that was too much.
His business model calls for getting at least a 3 percent rate of return on his land purchases. If he figures he can get $300 an acre in rent, he has to limit his bidding to $10,000 an acre.
"I don't have any compelling reason to own land; it's an investment. I'm looking for mispriced assets and usually I don't find them," Durbin said. "I've been to probably 200 auctions, and I've bid at around 60 of them, and I've bought at maybe 10."
The room got quiet for the final stretch of bidding. After bids for the whole farm reached $1.4 million, the auctioneers took a five-minute break, just to give the remaining interested parties time to confer.
When the bidding resumed, heads in the room swiveled back and forth, like a tennis match, as the Spanglers and the Wingers tried to decide what to do.
Farmers haven't forgotten the collapse in farm land values in the early 1980s, and neither family knew how high the other was prepared to go.
In the end, Brad Winger didn't use the word "bargain," but said he thought the same parcel would have averaged $11,000 an acre last year.
"I think the land is just now starting to soften, to mirror grain prices," he said. "We're all wondering when it's going to happen, and it may happen some more yet."
He also expressed gratitude that the record profits of the past five years have enabled local farmers to expand their operations.
The Wingers will be farming in Howard County for a long time to come.
Brad and his brother, Steve, who farm together, have three sons between them who are also planning to farm.
"We've been pretty blessed to have the success we've had," Brad Winger said.
Information from: Kokomo Tribune, http://www.ktonline.com