U.S. Farmland Prices May Fall in 2014, Economist Says – Bloomberg 12-10-13

Salient to Investors:

Terry Kastens at Kansas State University said:

  • Farmland values are about to stop rising rapidly, flatten out or even fall 10 percent or so, but will not crash.
  • Rising global crop output and stable renewable-fuel standards are leading to a flattening in commodity prices.
  • Rents in some areas may ease in 2014, with possible big drops in Iowa and Illinois if rents are negotiated every year based on forecasts for crop prices. Rents may rise in riskier growing regions including the High Plains because gains during previous crop rallies were moderate.
  • Land sales by farmers have climbed because producers with ample cash are still buying, while demand by investors eased amid concern that the market may have peaked.
  • Farmland prices may jump if commodity prices surge, sending corn back to $7.
  • We may see higher rents and higher property values in 2 o 10 years if crop output has massive consolidation, and large companies are able to pay higher prices.

Read the full article at http://www.bloomberg.com/news/2013-12-10/u-s-farmland-prices-may-fall-in-2014-economist-says.html

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Terry Kastens at KansasStateUniversity said:

Farmland values are about to stop rising rapidly, flatten out or even fall 10 percent or so, but will not crash.

Rising global crop output and stable renewable-fuel standards are leading to a flattening in commodity prices.

Rents in some areas may ease in 2014, with possible big drops in Iowa and Illinois if rents are negotiated every year based on forecasts for crop prices. Rents may rise in

riskier growing regions including the High Plains because gains during previous crop rallies were moderate.

Land sales by farmers have climbed because producers with ample cash are still buying, while demand by investors eased amid concern that the market may have peaked.

Farmland prices may jump if commodity prices surge, sending corn back to $7.

We may see higher rents and higher property values in 2 o 10 years if crop output has massive consolidation, and large companies are able to pay higher prices.