Minding Ag's Business
Marcia Zarley Taylor DTN Executive Editor

Wednesday 11/21/12

DTN Ag Business Benchmark: Land Leaves Stocks, Housing in the Dust
Inflation-adjusted farmland prices have been climbing since 1987. But bubble watchers think the consequences of any downfall -- when it happens -- will be quite different than in housing or stocks.[Read Full Blog Post]
Posted at 7:18AM CST 11/21/12 by Marcia Zarley Taylor | Post a Comment
Comments (3)
I smell a bubble forming when the land in the Eastern Dakotas brings similar prices as land in Illinois.
Posted by Matthew Schreurs at 9:37AM CST 11/21/12
Good article. But you left out a lot. I am a California Cattle Rancher, 69 years old, good perspective, seen bubbles. This isn't one, or at least a normal one. Subsidized corn was responsible for more agricultural ills than any other moronic institution ever conjured by government. It's gone now, or at least the impact of them, but only due to another set of direct and indirect subsidies centered on ethanol, again moronic in origin. In 1961, I learned from a past-retirement age professor, Dr. Mumford, at Oregon State about the macro-economics of producing past the point of rising industry returns, where producing more means earning less. I am sure every ag major at every institution of higher learning in the U.S. heard a similar lecture. Why it didn't stick with most I'll never know. Subsidized corn coming out of our ears (pun perhaps intended), was responsible for the development of the U.S. feeding industry and not the other way around. But it was the ancillary impacts of what IBP's Jim Peterson called a free commodity that were so devastating. Ranchlands in the U.S. and even all over the world werehighly devalued because you could feed 'um cheaper than you could graze 'um attitude that entrenched itself within the U.S. livestock industry. .. So if you want to look where land values are going, you need to look at where corn will be going and whether the cry-baby conservative Midwest farmers seek to raise subsidy net to whole new levels or not. Meanwhile, for the first time in 40 years my ranch has become profitable, not because cattle prices have risen but because feed values have risen. --H. Clay Daulton
Posted by Marcia Taylor at 8:06PM CST 11/25/12
This isn't a bubble like any other. Land prices are going wherever cash or other "frightened assets" decide to take them! Sometimes supply/demand will scare you to death! By the way ----- if you like feeding DDG's to livestock then stop trashing ethanol!
Posted by Roger Cooper at 8:33AM CST 11/27/12
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