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Big in Ag 2013: Farmland values
Few topics have dominated the ag news headlines in the last year quite like the farmland market and its current plateauing and expected turn lower. By November, signals were clear that the market's likely going to have a bumpy year in 2014, causing some to question buying land in the coming year.
Part of the sliding land values story has been an expected turn in interest rates. They can't get much lower than they are now, and rising rates could create some pressure on land prices.
But, though experts and market-watchers say the land market's ready to slide, late-year land auctions -- some of them, anyway -- didn't yet reflect the expected downturn. "all we can ever really know is what we're actually seeing in the marketplace," said one farm real estate broker in late November.
But, there's no doubt in many minds that the last year's been something of a pivot year for farmland values, and in mid-November, Federal Reserve economists confirmed what market-watchers in many key ag states had been talking about for months: The reality of a leveling off and possible downturn in farmland values in the coming months.
But, is the farmland market just taking a breather from its rocket ride higher, or is the expected leveling an inevitable function of the marketplace? History has certainly proven the cyclical nature of the land market; the last century of land market observations reveal a few common drivers of that cycle. But is today different? See some key factors to watch in the next year.
At a time when prices are falling -- whether for grain or land -- emotions start to sharpen. The proposition of buying or selling land, especially the latter, is typically an emotional one, and as such doesn't always follow market fundamentals and dynamics in lockstep. So, what should you do at a time like this? See what one longtime Iowa farm real estate broker said in mid-September.
By this last August, there were already a lot of farmers and market-watchers awaiting a downturn in the land market, with some saying it actually needed to happen in a market they saw as becoming a little top-heavy. Fed economists were by that point foreshadowing a fall in values. But, did everyone agree?
It's been a rough and tumble year for farmland values in the Corn Belt in 2013, with a major trend seen stretching into 2014.