Announcement

Collapse
No announcement yet.

Current Land Values

Collapse
X
  • Filter
  • Time
  • Show
Clear All
new posts

  • Current Land Values

    Will current values hold their ground or will current commodity prices eventually erode land prices?

    They definitely don't make any more good ground with good atmosphere so what are your predictions on future land values?

    Will land recede 30% or more if corn stays around 3 or so or will it hold steady. Could corn rebound to $5 or have we seen the last of good profits for the next 20 years?

    We have land bringing anywhere from $6700 to $9400/ac. I figure 30% retracement value in two years to $5500 or so. Is this too much?

    Land taxes look to balloon to unheard of levels from all the talk. $300 dollar rent could be a thing of the past, yet landowners paying $100 or more taxes calls for some real soul searching. How can they reduce rents if their costs escalate.

    More questions on wtf is going to happen in two to three years down the road.

    So, what is going to happen here on in? I would be curious to hear from you farmers or investors. Just curious on what is the attitude or perception going into 2015.

  • #2
    Land values around me have risen to the $8,000 to $12,000 range. I believe there is a good chance at seeing values fall back to the$4,000 to $6,000 range which is where they were before this big run up. Commodity prices and interest rates will have a lot to say about it but I think we could see this's happen over the next 5 - 7 years.

    I suppose land values could decline much more rapidly if it turns out that much of this high priced land is in weak hands. An old poster on here used to claim most of the land purchases in recent years have been for cash. In my neck of the woods, the heaviest hitters in the land market are big farmers that never met a loan they didn't like. Land has become increasingly concentrated in fewer hands. This could cause a much more rapid decline in prices if some of the large landholders start defaulting on loans.

    Comment


    • #3
      Land values have doubled over the last few years in my area. If you look at any line graph that tracks the value of farm or ranch land over the past few years it is obvious the increase has been rapid, tremendous and uncharacteristic. I think land values have topped. In some markets land prices are steady, but some have already started to decline. The headlines today tell the story.

      1) Corn and other commodities are down.

      2) Expenses continue to climb. Seed, fertilizer, replacement livestock, insurance, etc. all affect take home pay.

      3) The fed keeps talking about raising interest rates and farm income is projected to drop significantly.

      4) There are a great number of state and local governments that are having budget problems. Taxes seem to be going up and in a lot of rural areas fewer people, including operators, are carrying more of the tax burden. Rural flight is starting to hurt...

      I think there has been an ongoing story line over the last few years that "this time is different" because most operators are paying cash. I have trouble believing this is accurate. How much will land drop? I think 25-50% is reasonable given the meteoric rise over the last few years and the bleak outlook ahead of us. When will it happen? Different markets will behave differently, of course. But I think in general land will decline over the next 2-5 years.

      Comment


      • #4
        We're tracking some analysis that land prices may be leveling off or even declining in some areas. Recent examples:

        http://www.agweb.com/farmjournal/art...AA_Ben_Potter/

        http://www.agweb.com/article/experts...ociated_Press/

        http://www.agweb.com/blog/your_precious_land/

        Comment


        • #5
          NEWS FLASH
          POP! The land bubble has burst...

          It's the 1980's all over again. This time it will be worse and heres why.

          Costs:
          Input Costs
          Machinery Costs
          Land Costs
          Insurance Costs
          Taxes
          Labor
          Etc etc.

          Inflated Land Values and Machinery Values used on Balance Sheets.
          The used equipment market is starting to flood. Once the sell off of equipment and land begins both markets will be flooded and there will be few if any buyers to purchase either, thus turning a farmers most valuable material assets into liabilities.

          Electronic Trading
          Farmers and investors trying to short the market to capture a profit which in turn pushes the commodity markets in a downward spiral.

          Rural Population
          Lack of rural populations which equates to lack of representation at the state and national government levels.


          All of these factors are culminating into the perfect apocalyptic storm scenario for U.S. agriculture.

          A few will remain and make the most out of a bad situation, as history repeats itself yet again.

          Comment


          • #6
            Just heard about a local operator that sold out all his rented ground to a an Indiana operator. Deal includes 15,000 rented acres all bean on bean. The deal came with forward contracts for most of the beans through 2017 at prices above $16 a bushel. Didn't get to hear the sales price but I'm assuming it's pretty high. Heard the story third hand but heard it from two completely different sources so it must be close to true. That was some smart marketing. I don't even have this fall's crop priced.

            Comment


            • #7
              Originally posted by BinswOH View Post
              Just heard about a local operator that sold out all his rented ground to a an Indiana operator. Deal includes 15,000 rented acres all bean on bean. The deal came with forward contracts for most of the beans through 2017 at prices above $16 a bushel. Didn't get to hear the sales price but I'm assuming it's pretty high. Heard the story third hand but heard it from two completely different sources so it must be close to true. That was some smart marketing. I don't even have this fall's crop priced.
              Sounds to me like someone is blowing smoke. I'm no Einstien but how can you sell 2017 beans for above $16 when the Nov17 contract high is about $11.40 or even the Nov16 contract high of about $12.60???? Or even Nov15 contract high around $13???? I will tell you what I will make about the same deal with the guy that bought this contract but I will give him a discount and only tell him $15 for my forward contracts!!!

              Comment


              • #8
                A fool and his money is soon parted.

                Why would anybody accept being a surf to a farming operation has to be the real question..
                what is the fascination of people to jump in to be a slave of this type of situation?
                drug money laundering operation, what gives to subject or persue this mind of acceptance to this magnitude of risk, that is exactly why soo many fleed Europe and came to America. for life, liberty, and pursuit of property, to not be a mere surf of the few that owned the land in Europe, but to come to America in the pursuit of land ownership and to be ones, OWN BOSS and not be a mere surf to others..

                America is the land of the uneducated, the ignorant that work to be slaves and surfs of others.

                at one time , to never borrow money was the mind of the educated, to never borrow was a sense of the educated, today its a fascination to be a slave of others, a great ignorance that people gloat and brag on.
                Last edited by joe_alzado; 09-05-2014, 08:09 AM.

                Comment


                • #9
                  Joe, the situation has changed, now the smart thing is to leverage yourself out the wasuu and profit from the inflation. Thing is you need to know when to get out. Timing is everything. They'll make money all the up, then when it crashes, they'll make money all the way down. Been going on for decades. History will repeat.

                  Comment

                  Working...
                  X