Farmland is not a bubble, but a downward correction in values is likely is the conclusion of a special Rabobank report written by Sterling Liddell and Vernon Crowder. Basically the 8-page document indicates current price levels for Midwestern farmland are the result of favorable profit margins and low interest rates. But as profit margins narrow due to rising input costs, crop prices decline due to rising production worldwide and interest rates rise over time, the authors see increased risks of a correction in land values in the next three to five years. But they see that correction as only moderate.
For more, here is a short article based on an interview with the report authors conducted by Jeff Wilson of Bloomberg. I'll have more on this in the next issue of LandOwner.
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