Property Evaluation and Tract Planning

One of the most critical decisions in a farmland auction is how—and whether—to divide the property into multiple tracts. This is where Schrader's signature M3 Method (Maximum Marketing Method) comes into play.

Developed by Rex Schrader and Gene Klingman in the 1980s, the M3 Method allows a large farm to be offered in individual tracts, any combination of tracts, and as a total property—all at the same auction. A buyer can bid on Tract 1 alone, Tracts 1 and 3 combined, or all five tracts as a single unit. The property ultimately sells in whatever combination produces the highest total price.

Why does this matter? A 1,000-acre farm priced at $10-15 million may price out local family farmers entirely. By breaking it into 80- or 100-acre tracts, smaller buyers can compete alongside larger investors. The result: more bidders, more competition, and a higher final price for the seller.

During the tract planning phase, the auction team will:

• Analyze soil maps, aerial photography, FSA records, and county GIS data to determine logical tract boundaries
• Consider road frontage, drainage patterns, field access, and neighboring ownership
• Review yield history and any government program enrollments (CRP, EQIP, etc.)
• Identify "swing tracts"—parcels that can be attached to adjacent tracts to create flexible acreage combinations for buyers

The M3 Method was considered such a significant innovation that a professor of real estate finance at the University of Illinois called it one of the three most important auction innovations of the 20th century. Today, Schrader has developed proprietary software that processes the possible bidding combinations in real-time on the auction floor—an important detail we'll cover later.