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rswfarms
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Registered: ‎12-17-2012
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Faust- read what Michael Duffy, an economist in farm management says about land values

Faust- below is what Duffy, the Iowa State farmland "EXPERT" has just said about Iowa farmland values if or when we see $4.50 corn again. A 25% price decline would be around $3,500/acre on $14,000/acre dirt. A pretty good sized decline. I think the $3,500/acre drop he predicts could be going a little overboard. $4.50 corn and a normal yield, would work out to a 3.25% ROI Ratio. Below the long-term average of 4 to 6%, but not by much. What Duffy said is quoted below. Any opinions or thoughts on his predicted 25% decline in Iowa farmland values?

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“You can’t continue to see the price increases in land like we’ve been seeing. That’s just heading for trouble,” said Michael Duffy, an economist in farm management at Iowa State University. If the price of a bushel of corn were to fall to $4.50 from about $7 now, farmland values could collapse by as much as 25 percent, he said.