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146 comments on DrumBeat: December 16, 2007

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Leanan on December 16, 2007 - 10:49am Permalink | Subthread | Parent | Comments top

With Prices High, Farming Is Bright Spot In U.S.

Sky-high prices for corn, soybeans and wheat, and a jump in the value of farmland across the U.S. heartland, have boosted the fortunes of farmers this year and breathed fresh life into rural communities.

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mcgowanmc on December 16, 2007 - 11:05am Permalink | Subthread | Parent | Comments top

Thanx Leanan. I saw a couple of firsts in that article.

The main one:

"The Bush administration has threatened to veto the bill."

And Lugar (IN)'s siding with Bush.

Not lightly considered move.

And historically, farmers only benefit about two years
and then struggle thru about 14.

Secondary in the article:

Farmers buying land.

Bad move. Buy the land in one of those later
14 year periods.

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cycling in hollywood on December 16, 2007 - 2:31pm Permalink | Subthread | Parent | Comments top

In case you didn't notice, the times are changing now...with climate change and peak oil hurting agricultural yields worldwide we're in a whole new ballgame now, I can't see the value of well-watered farmland going anywhere but UP in future...

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eric blair on December 16, 2007 - 5:46pm Permalink | Subthread | Parent | Comments top

I can't see the value of well-watered farmland going anywhere but UP in future...

Up relative to other things - perhaps. If the population collapes from some form of pandemic then perhaps not.

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NZSanctuary on December 16, 2007 - 9:07pm Permalink | Subthread | Parent | Comments top

Only an economic/poverty pandemic (lack of food and water and sewerage and basic medical care) or a pandemic of resource wars...

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practical on December 16, 2007 - 6:08pm Permalink | Subthread | Parent | Comments top

Seems to me I recall the same thing being said about California real estate a couple of years ago.

I bought land in 1977 near the top of the previous cycle when corn was about $2.50/bu.. I have spent the last 30 years trying to pay for it as corn fell to as low as 1.45/bu. locally in 2005. Corn today at it's recent new high is still ridiculously under priced compared to oil, but if the anti ethanol types and the power down crowd get the upper hand, it could easily revisit the recent lows. I'm sure farm land would drop in such a scenario.

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memmel on December 17, 2007 - 2:17am Permalink | Subthread | Parent | Comments top

I tend to agree also for people looking for land more for personal farms you probably are looking for more of a mixed type acreage. I expect that a lot of people that now live on mini farms but have debt and are dependent on their jobs for income to try and sell as job/fuel pressures make "toy" farms unpractical. This will have a negative impact on land prices in general. Next commercial oil base farming will get squeezed like any other business and a lot of farmers are in debt so farmer bankruptcies will lower land values. Almost all the pressure on land prices has come from expansion of suburbia not the need of land for agriculture. So even if land was needed to expand agriculture the price points one would need to make it profitable to expand given the above are much lower than they are today. So a purely agricultural induced increase in land prices is at best in some far of distant future.

Short term I'd have to think that as long as oil supply is stable and we go into a recession we will see a pull back in oil prices which will probably cut the throat of the ethanol boom this coupled with the collapse of suburban expansion will probably lead to a collapse in land prices. I just can't see land prices remaining high give the general economic situation. The other choice that oil supply drops sharply and the economy slows with high oil prices still indicates to me that land prices will drop a lot.

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doug fir on December 16, 2007 - 1:12pm Permalink | Subthread | Parent | Comments top

Maybe farmers, but not much for ranchers. Cattle remain one area factory farms don't seem able to dominate. Yes, most all are eventually sent to feedlots, but no one has yet found a profitable method of calf production other than the unsubsidized, dispersed farms and ranches. Compared to the hog and poultry industries Poulan mentions in the toplink above, it's a world different.

Edit-Deleted as most covered in Leanan link's.

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