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Ben H
Member
Joined: 20 Mar 2006
Posts: 665
Location: Gorham, ME
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 Posted: Mon Oct 13, 2008 12:50 pm Post subject: Is Farmland The Next Asset to Collpase? |
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I could have probably put this under Political, maybe, but I think it's appropriate here. This comes from Allan's Blog
http://www.wincustomersusa.com/stockman/
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Is Farmland The Next Asset to Collpase?
Monday, 13 October 2008
Will farmland be the next asset to dramatically fall in price? Cash corn prices in the Midwest are now down to $3.50 a bushel and soybeans are at $8.00. At these prices, it takes at or near 100 bushels of corn just to pay the cash rent on top quality Iowa farmland. This means renters are in a real financial wreck considering the high price of other production inputs. In Argentina where farmers are currently facing these new low prices at planting, we have seen farmers abandon cash farmland leases and pull back into their deeded acreage. So far, farmland prices there have not fallen there but leases are going begging. I suspect we could see the same thing happen in the Midwest this spring. Farmland has already seen one price prop, exurbanization, removed. A dramatic drop in cash rents would set farmland up for severe price declines in 2010 and 2011 as investors exit. Unfortunately, due to the current banking crisis the exit window for cashing in on the recent price runup may have already closed. |
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Big Muddy rancher
Rancher
Joined: 10 Feb 2005
Posts: 7272
Location: Big Muddy valley
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mytfarms
Member
Joined: 08 Sep 2008
Posts: 612
Location: Dead center of Colorado
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| Posted: Mon Oct 13, 2008 12:56 pm Post subject: |
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| Well, good news for me as I start to try and put together some dirt.
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Carnes Lake Cattle Co
Member
Joined: 15 Jul 2008
Posts: 13
Location: Misplaced in Georgia
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| Posted: Mon Oct 13, 2008 1:00 pm Post subject: |
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| I just came home from looking at a place for lease down the highway from me. The gentleman offered me to lease it for 250,000 per year or I could buy it for 22.5 million dollars. We might could put 90-100 cows on it after we fenced and replanted the place at our expense. As was said untill land prices and lease fee's come down, I can see alot of leases being turned in.
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Big Muddy rancher
Rancher
Joined: 10 Feb 2005
Posts: 7272
Location: Big Muddy valley
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Mrs.Greg
Rancher
Joined: 09 Jan 2006
Posts: 6357
Location: Alberta
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Yanuck
Rancher
Joined: 10 Sep 2007
Posts: 1262
Location: idaho
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Big Muddy rancher
Rancher
Joined: 10 Feb 2005
Posts: 7272
Location: Big Muddy valley
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kolanuraven
Rancher
Joined: 27 Jul 2005
Posts: 7907
Location: planet earth
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feeder
Member
Joined: 12 Feb 2005
Posts: 914
Location: Iowa
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| Posted: Mon Oct 13, 2008 4:07 pm Post subject: |
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| Here in NW Iowa land was selling for $10,000/acre a month ago. Now there have been land auctions in the area that are getting 5000/acre for top bid and they are being no saled.
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bverellen
Member
Joined: 09 Apr 2007
Posts: 54
Location: sw florida, someday colorado
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| Posted: Mon Oct 13, 2008 4:29 pm Post subject: |
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What is meant by land being priced to it's productivity?
I've heard this mentioned before as to what ag land used to be worth before all the folks from the cities started driving up prices.
TIA
bart.
<///><
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Carnes Lake Cattle Co
Member
Joined: 15 Jul 2008
Posts: 13
Location: Misplaced in Georgia
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| Posted: Mon Oct 13, 2008 5:59 pm Post subject: |
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| With that offer me and my wife were thinking of selling our place. we could buy a house in town and live pretty well.
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