More than 800 acres of prime farmland in Delaware and Madison counties sold during open bidding on Tuesday for $7.9 million.
John Paugh, CEO of an Anderson trucking company, outbid a group of five other bidders for the 14 tracts in western Delaware County, 10 of which are contiguous and total 557 acres, and one tract in eastern Madison County.
The price per acre was $9,482.
About 150 people attended the auction at the Horizon Convention Center, but only six were still bidding at the end, The Star Press reported.
Like most in the audience, Charles McCarty, an appraiser with Rabo AgriFinance in Indianapolis, dropped in out of curiosity.
"I'm just here to judge the mood of the market," McCarty said, "to see if there will be big demand and interest or if people will sit on their hands and watch it not sell."
There was big demand.
Purdue University's latest annual farmland value survey found that the highest quality farmland in the state increased 19 percent in value between 2012 and 2013 to $9,177 per acre. Tuesday's auction topped that figure.
High net farm income combined with favorable interest rates, strong farmland demand and a limited supply of farmland for sale pushed farmland values higher last year. The next farmland value survey won't be published until August.
"We appreciate your interest; if you're done, we're done," auctioneer R.D. Schrader said after the bidding reached $7.5 million. "Anybody else?"
After Paugh bid $7.7 million, Schrader told a group of five bidders, "You've got 2 minutes to beat $7.7 million."
The bids kept climbing until Paugh bid $7.9 million.
"I'm going to give you 2 minutes starting now to beat $7.9 million," Schrader said as the clock ticked down. "Thirty-five seconds, yes or no? Anybody else? Fifteen seconds. Ten, nine, eight ... sold, sold, sold!"
After it ended, Paugh quickly walked backstage and didn't re-appear. He couldn't be reached for comment by telephone at Carter Logistics or Carter Express, which employ more than 750 people in Madison County in the motor carrier industry.
In December, Paugh was honored as "Entrepreneur of the Year" in Madison County.
Given all of the different uses for corn and soybeans, including ethanol and soy biodiesel fuel, as well as growing demand for corn from China, McCarty and Schrader called farmland a sound investment, especially if the investor buys it with little or no debt.
"It's kind of like the rich get richer, and the poor stand on the sidelines and work for him," McCarty said.
It took Dale and Nina Lee a lifetime to accumulate the farmland that Paugh bought after 90 minutes of bidding on Tuesday. The farm also includes a 156,000-bushel grain bin storage and drying facility near Cammack.