Iowa farmland still good investment, as economy eases: Realtors, economists
(Iowa Farmer Today) Iowa’s farmland remains a good investment, according to Realtors and economists who gathered recently for the Iowa Land Investment Expo.
“I think the correction is over,” says Mike Ralston, editor of the “Landowner Newsletter.”
That opinion was echoed by others at the expo, who said while land values fell in 2009, that decline appeared to slow at the end of the year.
Mike Duffy, the Iowa State University economist who coordinates ISU’s annual land value survey, says land values appear to be flat, but they probably aren’t still falling.
David Oppedahl, an economist with the Federal Reserve Bank of Chicago, says there are several reasons to be cautiously optimistic about the direction of land values.
BUT, HE says buyers should watch several trends, such as:
Inflation is still low.
Food prices and commodity prices remain volatile.
Energy prices and farm input prices also remain volatile.
The recession appears to be ending, meaning most economic indicators have at least stopped going down and show some signs of upward movement.
Housing purchases remain low but are improving a bit.
Unemployment remains high.
The dollar has remained low, which could potentially help farm commodity export sales.
The bottom line, according to several of the speakers, is while livestock prices have been very poor for the past two years, crop production generally has been profitable.
ALSO, 2010 appears it will allow crop and livestock producers to enjoy profits. That bodes well for farmland prices.
In real dollars (adjusted for inflation) land prices probably peaked in about 1979, Duffy and Oppedahl say.
But, farmland has been a very good investment in recent years, and neither economist predicts a dramatic drop in farmland values this year.
Duffy also says today’s situation is much different from 1979 because today’s farmland owners and buyers are not heavily leveraged.
http://www.iowafarmer.com/articles/2010/02/04/top_stories/land14.txt
“I think the correction is over,” says Mike Ralston, editor of the “Landowner Newsletter.”
That opinion was echoed by others at the expo, who said while land values fell in 2009, that decline appeared to slow at the end of the year.
Mike Duffy, the Iowa State University economist who coordinates ISU’s annual land value survey, says land values appear to be flat, but they probably aren’t still falling.
David Oppedahl, an economist with the Federal Reserve Bank of Chicago, says there are several reasons to be cautiously optimistic about the direction of land values.
BUT, HE says buyers should watch several trends, such as:
Inflation is still low.
Food prices and commodity prices remain volatile.
Energy prices and farm input prices also remain volatile.
The recession appears to be ending, meaning most economic indicators have at least stopped going down and show some signs of upward movement.
Housing purchases remain low but are improving a bit.
Unemployment remains high.
The dollar has remained low, which could potentially help farm commodity export sales.
The bottom line, according to several of the speakers, is while livestock prices have been very poor for the past two years, crop production generally has been profitable.
ALSO, 2010 appears it will allow crop and livestock producers to enjoy profits. That bodes well for farmland prices.
In real dollars (adjusted for inflation) land prices probably peaked in about 1979, Duffy and Oppedahl say.
But, farmland has been a very good investment in recent years, and neither economist predicts a dramatic drop in farmland values this year.
Duffy also says today’s situation is much different from 1979 because today’s farmland owners and buyers are not heavily leveraged.
http://www.iowafarmer.com/articles/2010/02/04/top_stories/land14.txt
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