Creighton University Economist Dr. Ernie Goss thinks some air may be slipping out the farmland market. He makes that observation after looking at the decline in the farmland price index component of his Rural Mainstreet Index (RMI). The RMI is a survey he conducts monthly of ag bankers in non-urban agriculturally and energy-dependent regions within 10 upper Midwestern states. States surveyed range from Colorado to Illinois and North Dakota to Kansas.
The farmland index slipped to 62 in June, down from May's 75 and April's 77.6. One year ago, the index stood at 54.7. The farm equipment sales index edged lower to 63.1 compared to 65.9 in May. "We are beginning to see some of the air exiting the farmland price bubble," states Goss. "In my judgment, this is not a bad outcome. A significant upturn in the value of the dollar stemming from the European debt crisis could drive the dollar higher and agricultural commodity prices Lower. This would weaken farm income growth and take even more of the air from the bubbles we have been seeing in farmland and farm equipment sales," says Goss.
Click here for his full report.
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