Economics and Farmland Prices Dominated Conference
In the absence of congressional policies to encourage job growth from having the public spend their money, all the U.S. government has left for economic improvement is monetary policy to make the public feel richer and go out and spend. Much of the success of the economy depends on “velocity,” the more times or faster a dollar turns, which means more jobs can be supported by each dollar.
Ray Brownfi eld (right), AFM, ARA, Land Pro, LLC, was presented the D. Howard Doane award by Jeffrey Berg, ARA, Crown Appraisals, and ASFMRA immediate past president. The award is given for outstanding contribution in the field of agriculture with emphasis on farm management and rural appraisal. If Congress refuses to address cutting social security, Medicare and welfare, then the budget deficit has to continue increasing. “The government is going to print $1 trillion into infinity and ultimately they won’t be able to pay it back, and ultimately when a government does that and cannot pay it back, they cancel their currency and start all over with a new one. And that farmland that someone over paid for, paid $21,000 for it, the guy or gal might not be feeling all that badly when the green currency you had in your pocket is canceled and you turn it in for a red one that has a completely different value to it. That farmland is not going to care if your currency is green or red; it is going to grow something and produce some income. So, in my mind that is why people are doing this, and I don’t see an end to it.”
MIKE WALSTEN, EDITOR OF LANDOWNER NEWSLETTER
The southeast U.S. has been the area where agricultural land has not tracked at quite as high of a percentage of increases as the Midwest.
Mike Duffy (right), Ph.D., Iowa State University was presented the Carl F. Hertz Distinguished Service in Agriculture Award by Randall Hertz, AFM, Hertz Farm Management. Farmer income should still be high in 2013 and renters could still make a profit with adjusted higher rents in many cases.
During the fall, quite a bit of farmland came onto the market for auction sale. “We have a little land rush going on right now, but after we get through January 1st, although no one knows for sure what supplies will do, I expect they will tighten up once again because people just don’t want to sell land unless they are a third or fourth generation and they have a one-third or one-fourth interest in 40 acres and they might as well have the cash.”
Farmers have kept their leverage down and kept adequate working capital, but there are other considerations. “Watch for political interference and watch for China having a hard landing, which does not seem to be the case, even though you hear a lot of chatter about it. They still are getting an 8 percent growth rate, which is a very strong rate for keeping China going as a very strong factor in going forward to 2015 and beyond.”