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highyields
Senior Contributor

Re: 3 big-time farmland factors; Income's still king -- Duffy

This week 2 parcels sold, average ground, sold for the number 2 and 3 highest selling prices in my county on record.   What I see that is different about this time is the interest rates are so ridiculously low,,,and the numbers are bigger.  In the 1920's the price of wheat a corn lost close to 90% of price,,,in 1970's the corn price was down to under $2 by the early 90's, so do things change, YES, the idea that corn well be $6 or $7 or even $4 might be true in the next 10 years.   When this all started someone stated that corn will settle down to the $2.75 area when this cycle bottoms out, those farms that sold this week in my are, won't be paid for by then.   

 

 

We also have this inflation business that hasn't been talked about at all, when the Feds decide there is inflation in the market I sure don't want a variable rate loan. 

 

I was told by one of the local bankers that instead of using cash for down payments a lot more farmers are using land they already own for the security they need for the loan.    

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Kay/NC
Honored Advisor

Re: 3 big-time farmland factors; Income's still king -- Duffy

In other words, they are risking what they already have, in pursuit of record high-priced land.

What could POSSIBLY go wrong, given that scenario?
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AgFuture
Contributor

Re: 3 big-time farmland factors; Income's still king -- Duffy

If you want to do a deal bad enough...you'll do a bad deal!!!
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sw363535
Honored Advisor

Re: 3 big-time farmland factors; Income's still king -- Duffy

It appears -----We have sacraficed any potential control of inflation by using interest as an economic stimulus.  The current response to inflation is to deny, ignore and ratchet up public assistance.

 

The government printing presses are in direct competition with savings.  Land purchase may be a desperate attempt to transfer assets.

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