Buy Ag Land? They ain't making any more of it

An interesting news bit from the Red River Farm Network‘s FarmNetNews newsletter:

Land Values Called Unbelievable — The Federal Reserve Bank of Kansas City says farmland values in the Plains increased in the third quarter due to generally rising farm incomes and robust demand for land. Murray Wise, with Murray Wise Associates, sells farmland. “The interest in land sales is just totally and completely unbelievable, and I think it’s very sustainable. In Northwest Iowa, believe it or not, we’ve now seen two auctions at over $10,000 dollars an acre; it just blows my mind.” Wise thinks the demand for land is in response to higher commodity prices, which are being fueled by demand from Asia. One driver to sell land is the fear of higher capital gains taxes, but Wise says another driver not to sell is that there is no good alternative for investing the money received from selling land.

Listings are Short — According to Paul Joerger, Farmers National Company, land prices are as volatile as commodity prices. “A lot of people are wanting a hard asset right now; several years ago, they got hit with the stock market plummeting and we’re finding a lot of people chasing the real estate market for ag right now, but there’s not much for sale,” said Joerger, “People are saying if I sell, where do I go with my money?”

For a little context, the map above shows average farmland values across Minnesota in 2008, as compiled by the University of Minnesota Dept. of Applied Economics.  I took a closer look at Nobles County, which sits on the Iowa state line along I-90 in Southwest Minnesota.  In 2009, the average price of farmland in townships (discounting ag land within city limits) was $4,162 per acre.  Check out the UMN website for the fine print.

If you doubted the Great Reset is re-cycling everything we thought we knew about the Great Depression, heres another reminder in the vein of Will Rogers’ “Buy land. They ain’t making any more of the stuff.”

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