Farm Business

[Jim Meade / Iowa City]

Here is a blog you ought to read about the reaction of farmers to current farm land prices and values.  I was quite surprised at the wide range of estimates on value.

I was interested in the logic and conclusions the researchers drew, and think they are useful.

Farming has generally been profitable the last five years.  It's related strongly to export markets, ethey say. 

However, I was skeptical when I read  about future profit and income.  I am a skeptic and thing that input costs rise to match income within a fairly short time so I don't expect the high profits to last long, excpet for those who own land or have it bought at low prices.

Read it yourself - it's only a page long.

http://www.farmgateblog.com/article/1581/will-the-next-farmland-auction-be-higher-or-lower-in-price

Here's the summary, but I don't think it does justice to the piece - I recommend you read the piece.

"Summary:
 Farmland prices have exploded upward, driven by demand for commodities and low values for alternative investments. Farmland has to earn its value, and part of that is the current high revenue generated by corn and soybeans, which has been a recent phenomenon. For such revenue to continue, and to support high values for land, either through grain sales or cash rent, it will require federal farm policies and international macroeconomics"