Farmland Values Spike

Not sure what the numbers are here in South Dakota, but this is crazy:

The average value of farmland in some Midwestern and Western states has risen 25 percent in the past year.

The Federal Reserve Bank of Kansas City, Mo., said Tuesday that bumper crops and strong farm income in northern Plains states, like Nebraska, helped push up prices despite drought and flooding.

And the biggest winner?

Nebraska farmland values increased the most with a roughly 40 percent jump over 2010. [emphasis added]

Does this mean the land was undervalued previously, or are we seeing the race to the top of the subsidy based bubble? What will happen when the new farm bill does not guarantee income for all of these farmers?

5 thoughts on “Farmland Values Spike

  1. Bubble. Federal subsidies of ethanol artificially increase demand for corn, driving cost of corn up.

    As corn becomes more valuable, so does the land used to produce it.

    Kill those subsidies, kill the corn price. Kill the price of corn, kill the land price.

    1. Now that the price of land is high, those who have land do not want the value to drop–giving them added incentive to support the subsidies that drove it there in the first place.

      We gotta stop doing stuff like this.

  2. We do. We will.

    The only question is whether we will stop doing it in a controlled, rational way that minimizes the damage, or whether we will do it because our economy comes to a halt in a way resembling the way a car stops after going off a cliff.

    1. That’s the concern that I’ve voiced to several farmers (that we will not have a controlled let down from the subsidy plateau). I’ve been told something like “Well, let’s see what happens.”

      By then, I am concerned that it will be far too late for anything short of economic chaos in the ag community.

      1. We can only speak the truth. We can’t make people believe it.

        But I sure will be ready to say, “I told you so” when the time comes – not to gloat, as the smash-up will likely involve me, too, but in the hopes that people might learn from experience what they would not learn from study or words.

        Well, there might be just a teensy bit of gloating. Maybe.

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