Has anyone done any cycle research as to when one could occur and what might be the catlyst.
3.50 corn doesn't buy much land on my world , however land values are still firm.
It would take at least 3 years of sub 3 dollar corn in my book to see land values decline 20%.
Big crop,big carryout, plc and arc fading away , maybe ethanol gets,wacked, suppose its possible. Perfect storm!
Re: Ag Reset
Just my observation (so I can be wrong) what I see is a tremendous amount of off-farm capital in and coming in to farming and land purchases, Iowa farmland actually went up a percent or 2, for first time in 2,3yrs, so it`s a sign of a bottom. This outside money or pent up old money buys into "9 billion world population by 2050", in other words grandpa wants to leave junior a legacy of being one of the food supply monopolies in that brave new world. I don`t know how demographics, politics and property taxes play into their equations, but it must be their thought process.
So, I don`t know if $3.50 or $3 corn plays into their bidding price or not, they`re thinking long term. The 30yr old, new money hotshot might cry "uncle", but those that stroll into local eateries and pull out a roll of C-notes and pays the entire patron`s bills and drive off in his convertible ...I don`t know as they will back down at the land auctions. There is one heck of a lot of money out there, never seses to amaze me.
Re: Ag Reset
on the southern fringe we are seeing land values down at least 20%.... In some areas water value is still high but the land value is not where it was.
And a lot is being sold and offered..... and no saled.
I think the 2008 hangover is still here and that keeps land in the investor mind. It is hard to find private sector profits that are not tied to a government project or tax advantage.
An ever increasing amount of farm land is within development speculation range of a decent sized city.... most of the corn belt. I think that factors in .
All business continues to struggle against the internet. And those who look profitable on the internet are still living off potential and tax avoidance.
I haven't seen UPS sponsoring the local HS sporting events yet, even though in a lot of small towns they are delivering more sales than the store fronts who do sponsor.
Re: Ag Reset
No doubt the fringe will be the first to feel the pain...and maybe they still have some pain to go. I mean if the basis is $1.50 under or whatever ElCheapo says and the towns losing population so not much need for construction work and such, there wouldn`t be that readily available source of outside money coming in...oh "oil wells" maybe, but they got it tough as agriculture.