Farmland Prices Dip
August 26th, 9:17 pm by
August 29th, 9:17 pm
The price for farmland has actually dropped from last year, something that hasn't occurred since 1986.
Experts are pointing toward a big decrease in commodity prices, particularly corn, for the drop.
The Federal Reserve Bank of Minneapolis found in its most recent quarterly survey that the state's farmland prices are down 4.5 percent.
And local experts say some areas are down as much as ten percent, mostly because of falling commodity prices.
Charles Wingert, of Wingert Realty and Land Services says, "We still have all-time low interest rates, ultra low debt levels, a lot of cash out there after record years of profits, but we also have corn prices going from $7.50 down to a little over $3. So there are three positives, but one big negatives."
As an example, a land auction this morning went for $9,200 an acre. Down from previous highs, but not correlating to a corn price that's been slashed in half.
Seeing has how there hasn't been a drop in price, a market correction, in nearly 30 years, it may not be all that bad.
Wingert says, "Some of the agricultural economists feel we're going to see commodity prices bottom in 2015 and start to rebound. How quickly it'll rebound - nobody's crystal ball is any clearer than anybody else's. We're not going to see a collapse."
Not the end of the world, but when $4 billion in value disappears, it tends to be noticed.