Farmland Barometer Home » Farmland Barometer April 2011 » Farmland Value Drivers
Let's go back to our original premise. Here are some of the factors that we believe are behind the price surge. The upcoming year has some special bright spots in it for all.
We could talk about these individual factors in lots of detail. I'm sure that you understand each of them. Together they are pushing farmland prices rapidly higher. And - - they are solidly in place - - we expect the land value trend to continue upward.
Are we in a Bubble? - There has been a lot of discussion about the rapidly rising farmland prices. Have we gone up too quickly and are in a bubble like other commercial and residential real estate? Probably not - - because the factors driving farmland values are solid. There is not much speculation or unusual influences that created other bubbles in our financial mess. Could agricultural land turn downward - - yes it could. Commodity prices would have to decline rapidly and interest rates and the dollar would have to go up dramatically - - or the government could interfere with ethanol. That would bring a change in our land price direction.
Where do we go from here? - Turn your hat sideways and hang on tight. The volatility in agriculture is at high levels because of a number of folks involved in our market. When big money enters a room - - look out - - it can produce lots of unsuspected price directions.
April 2011 Farmland Barometer
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