This increase in land values back in the cornfield is dramatic the biggest one year increase in over three decades. Increases such as this cannot be sustained and there will be consequences similar to inflated home prices. These guys get dollar signs rolling in their eyes at times and this is one of them. The economy crashed before in the 70's when farmers encouraged by the feds to expand their operations with easy money. They did and many went bust forever changing who owned what. It is a bit different this time in that some of these guys are paying cash for land.
On 4/07 wrote this about how much land values had jumped and that an acre of land was selling for $4000 an acre and we thought that was an amazing number.
The part of the cornfield I come from land now sells for at least $8000 an acre and sometimes more. Friends who own land say and this is not a stretch at all that if they told someone in the morning they were going to sell land when they come in the afternoon they wouldn't be able to get in their driveway because so many want it. I think my one friends land would sell for 9K an acre and maybe more.
Eventually this will all come crashing down as numbers such as this cannot be sustained. The linked to article is a wealth of information.
Fueled by increases in livestock and corn prices, the value of Iowa farmland jumped 24.5 percent since March 2010 — the biggest annual increase in more than three decades. A survey by the Iowa Farm and Land Chapter No. 2 of the Realtors Land Institute shows the average value of all tillable cropland in the state as of this month was $5,708 per acre.
So, do you think these are people who are buying it up knowing more and more folks are going to want/need to go "back to the land" and they will stand to make a profit? Or are these folks who are actually buying enough for themselves to do so, with an eye on a frightening future? Either way, the price is beyond absurd. I will say, I sure am glad I bought my place when I did last summer.
ReplyDeleteNo Teresa I think it's the bottom line of making money only. That's the way it's always been. Just think 1.3 mil for a quarter section. You must be seeing some of the same in Minnesota.
ReplyDeleteThis is Wall Street speculators and traders fucking everyone they can in order to try to step on ppl on their way to the top. Remember I said that.
ReplyDeleteThis is banksters trying to fuck everyone so they are the the ones with all the power.
As long as they control food, water, electricity and oil
they can do that. http://politickybitch.blogspot.com/2011/02/congratulations-commodities-speculators.html
http://politickybitch.blogspot.com/2011/01/griftopia-by-matt-taibbi.html
I hope to get out of this world never having owned any real estate. But I've been lucky to have farm-land connections. Sometimes I linger over the thought of joining a commune or a land-trust group--as close to land owner as I'd want to be.
ReplyDeleteMy bil said the same thing when we were up in Nebraska. He thinks the farmers have made so much money that they're parking it in land instead of putting it in banks. Banks won't loan more than 4,000 per acre because it can't produce more than that. Which is why they're paying in cash. Of course these are the farmers that voted for Bush and McCain and their Senators held up the health care bill talking about death panels.
ReplyDeleteBingo Patrick! Thanks for that.
ReplyDelete