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Veteran Contributor

Re: Farmland Sale-Faust & BaDeere/OLD MAN

You are such a moron, RSW----a little humility would go a long ways for you.

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Senior Contributor

Re: Farmland Sale-Faust & BaDeere/MIKENCIA-MAKES ME A MORON????

Explain why you think I am a moron MikeNCIA??? Because I refuse to ride down another Farmland Crash in values? That is not being a moron, it is just preparing for something that could happen. Would you ride down an Iowa Farmland drop in value from $14,000/acre today, down to $1,000/acre???? The $1,000/acre is what top-quality land hit for it's low in 1986. If you only own 1,000 acres of good Iowa farmland, that's around a $12 to $14 Million dollars of lost equity. Would you want to lose $14 Million dollars of your families money in just 5-6 years??? Anyone that does that, maybe then he is a MORON, but just preparing for a possibility that something like that could happen again is just being a good business man and having a back-up plan to prepare for the worst is something all farmers should have, don't you think???? Anyway, tell me why having a back-up plan makes me a MORON??????

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Veteran Contributor

Re: Farmland Sale-Faust & BaDeere/MIKENCIA-MAKES ME A MORON????

You are are a moron because you have to embelish every comment you make about how "brilliant" you were for marrying for farmland.

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Senior Contributor

Re: Farmland Sale-Faust & BaDeere/MIKENCIA-MAKES ME A MORON????

If you knew the number of people that called me a complete idiot when I started buying farmland as an investment in 1986, you too would bring up the comparison of putting your investment money in SP500 Index funds or farmland. I do enjoy telling people that since 1986 in a Farmland vs SP500 Stock Index Fund, farmland has outperformed the stock market. That is all I am saying. Since 1986, farmland has outperformed the Stock Market Index Funds. It is nice to know that you were much better buying farmland back in the late-1980's vs Stocks. Again, that is all I am saying. And you didn't have to be very bright to see in 1986 that farmland values were way, way, undervalued and offered a much better chance than stocks as your investment of choice. Anyway, all the data and analysis's now show this to be true. Is it an example of what the future may bring in the old, old, comparison of which is a better investment, Farmland vs Stocks? I don't have an answer to what they will be like in 10 years, but time will tell.

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Senior Advisor

Re: Farmland Sale-Faust & BaDeere/OLD MAN

In the first place i know of no land selling at $5000 per acre in north central Iowa prior to the bust in the mid 80's. The best of it was approaching $3500 per acre and that was rare. Those acres did drop to $1k per qcre or a bit ;less. There was no 80% shrink in land prices but there was a 60% shrink in some land values. From $3k to $1k.

 

Secondly land was not underpriced at $1k per acre, The market was established at those levels because there were not many willing buyers and those of us that did, did not do so without risk. Recessions can become depressions and that $1k floor price can evaporate to somewhat less.

 

As to todays land prices a small percentage of sales hit those magic numbers of $12.5k or $14.5 K. Go to the hertz website or to the Farmers National website and study their auction sales histories and you may be amazed at the number of quality farms that have sold at auction from $8k to $10k over the last couple of years> certtainly prices are moving higher but $15k for good land is a rarity not the norm. Of course the high dollar plots are news worthy. That does not mean your quality farm or mine will bring $15k And how often do you find a NC Iowa farm with a high percentage of top quality soil types?

 

Thirdly, I think the debt exposure on high quality land is far different now than during the 80's. The lenders are smarter and the farmers are smarter. Thus I beleive those farm mortgages are far better supported with adequate collateral. While I do beleive that lower prices are possible I would not expect the forclosure rate to approach the levels of the 80s.     

 

 

 

 

 

 

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