I was just reading a news article about farm land selling for over $10,000/acre in places like Iowa. Part of this is because of the money from corn crops for ethanol, and other crops are increasing in price. Regulators worry this is may be an unsustainable bubble driven by financial markets.
Midwest farmland another financial bubble?
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Hay here shot up close to $300/ton in 2007-08. Everyone put in more and more hay ground. Here we are late winter 2011 and hay is down to $70/ton. Reasons are obvious. Corn may be entirely different where corn/land prices are controlled by Wash DC obviously so how the goes is anyones guess. Most farmers I personally know here are putting in more and more wheat right now.
AMEN to that!!! I got about 32K sitting in a bank earning 0.5% APR and CD's aren't much better, 0.65% APR for 181 days. Can't really invest that money in stocks or funds right now, wife is going to school and not working, so I need quick access to that cash "just in case" something goes awry in life....HVAC goes kaput, unexpected bills, etc. etc. Just chaps my arshe.
Money moves around, there was a farm land bubble years ago which allowed the farmers to refi and take out money to buy other things. After that many farms went into forclosure and everybody was supposed to feel sorry.
Originally Posted By: Steve S
Money moves around, there was a farm land bubble years ago which allowed the farmers to refi and take out money to buy other things. After that many farms went into forclosure and everybody was supposed to feel sorry.
As one commentator recently said "Money talks. Problem is all it ever says is 'good-bye'".
Money moves around, there was a farm land bubble years ago which allowed the farmers to refi and take out money to buy other things. After that many farms went into forclosure and everybody was supposed to feel sorry.
As one commentator recently said "Money talks. Problem is all it ever says is 'good-bye'".
I think it will be a slow bubble to grow and it will pop slowly. Any investor worth his salt knows that if you cannot get revenue from farmland it is financially not worth buying it. So I think the banks will be smart enough not to rush into this like they did in residential real estate.
What's different from the 1980's is that most farmland is now owned not by the guy that actually farms it, but by descendants of farmers and third party investors. Most of the farmers own 160 acres or so and contract with these owners on another 600 acres. So they are not as exposed to a drop in land prices.
+1 I don't think any actual farmer is buying land at this price. Although many might be selling, 200 acres for $2 million...
I was reading a while ago that large multinationals and China where buying up farm land through front companies.
I was reading a while ago that large multinationals and China where buying up farm land through front companies.
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Originally Posted By: Steve S
Money moves around, there was a farm land bubble years ago which allowed the farmers to refi and take out money to buy other things. After that many farms went into forclosure and everybody was supposed to feel sorry.
Not quite. The Secretary of Agriculture said that farmers should expand or get out of the business. They did both. They expanded ..the market failed to support the expansion ..and the government, the same one that compelled them to do so, offered no support/relief. They folded.
Money moves around, there was a farm land bubble years ago which allowed the farmers to refi and take out money to buy other things. After that many farms went into forclosure and everybody was supposed to feel sorry.
Not quite. The Secretary of Agriculture said that farmers should expand or get out of the business. They did both. They expanded ..the market failed to support the expansion ..and the government, the same one that compelled them to do so, offered no support/relief. They folded.
Here's a link to the story,http://www.dispatch.com/live/content/ins...rs.html?sid=101. It just seems the market is crazy constantly trying to create bubbles that boom and bust.
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Originally Posted By: mechanicx
It just seems the market is crazy constantly trying to create bubbles that boom and bust.
The scams/fad go where the money is. Have you noticed all the auto insurance commercials lately? Auto insurance was a LOSER. In Pa for DECADES companies had to be leveraged to compel them to sell it as a condition of being licensed to operate in the state. Everyone who was getting insurance had to go into a pool of 'must offer' policies.
Now it's where consumer $$ can be had. It too is a privately operated socialized product. We all bear the costs of all operators of vehicles. We bear the costs of all auto theft.
Oh, and start noticing the Nero form of urban renewal in your area. Fire companies are getting lots of business ..as are homeowners policies.
It just seems the market is crazy constantly trying to create bubbles that boom and bust.
The scams/fad go where the money is. Have you noticed all the auto insurance commercials lately? Auto insurance was a LOSER. In Pa for DECADES companies had to be leveraged to compel them to sell it as a condition of being licensed to operate in the state. Everyone who was getting insurance had to go into a pool of 'must offer' policies.
Now it's where consumer $$ can be had. It too is a privately operated socialized product. We all bear the costs of all operators of vehicles. We bear the costs of all auto theft.
Oh, and start noticing the Nero form of urban renewal in your area. Fire companies are getting lots of business ..as are homeowners policies.
It is crazy. My BIL farms in NW Iowa -- which has very rich land compared to the middle of ND (my native country). It goes for $7K/acre where he's at. It's crazy to think that 80 acres of farmland would be over $.5M. I wouldn't think you could break even in a lifetime.
Great news for my in-laws. They are ready to sell their 80b acres in NW OH - more power to them as it is a good way to finance their retirement.
Originally Posted By: kkreit01
It is crazy. My BIL farms in NW Iowa -- which has very rich land compared to the middle of ND (my native country). It goes for $7K/acre where he's at. It's crazy to think that 80 acres of farmland would be over $.5M. I wouldn't think you could break even in a lifetime.
Are you sure it is not for building houses?
It is crazy. My BIL farms in NW Iowa -- which has very rich land compared to the middle of ND (my native country). It goes for $7K/acre where he's at. It's crazy to think that 80 acres of farmland would be over $.5M. I wouldn't think you could break even in a lifetime.
Are you sure it is not for building houses?
Originally Posted By: PandaBear
Originally Posted By: kkreit01
It is crazy. My BIL farms in NW Iowa -- which has very rich land compared to the middle of ND (my native country). It goes for $7K/acre where he's at. It's crazy to think that 80 acres of farmland would be over $.5M. I wouldn't think you could break even in a lifetime.
Are you sure it is not for building houses?
Yes -- not development land. Farmland -- corn & soybeans.
Originally Posted By: kkreit01
It is crazy. My BIL farms in NW Iowa -- which has very rich land compared to the middle of ND (my native country). It goes for $7K/acre where he's at. It's crazy to think that 80 acres of farmland would be over $.5M. I wouldn't think you could break even in a lifetime.
Are you sure it is not for building houses?
Yes -- not development land. Farmland -- corn & soybeans.
My brother put 80 acres of flat unirrigated central Kansas farm land on the market for $1200/acre about five years ago, and had a signed contract in less than 24 hours! I thought he was asking a bit much, but evidently not! I have around 400 acres of my own crop and pasture land that I hope to unload during this so-called "bubble" to finance my upcoming retirement. I'm reading about world-wide food shortages, so maybe farm land will be the "new gold"...who knows?
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Originally Posted By: Beachboy
My brother put 80 acres of flat unirrigated central Kansas farm land on the market for $1200/acre about five years ago, and had a signed contract in less than 24 hours!
I hope it's not now owned by a Chinese entity of some sort.
My brother put 80 acres of flat unirrigated central Kansas farm land on the market for $1200/acre about five years ago, and had a signed contract in less than 24 hours!
I hope it's not now owned by a Chinese entity of some sort.
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