Reports of recent land sales in my area are trickling in and I think we can pinpoint where the $46B in government payments went around here anyway. Unless my information is worse than usual, farmland has jumped at least 20% from last year. Of course, numbers like this are based on a tiny number of sales in one location, not a national average, so your results may vary, as they say. Land appreciation is a slam dunk prediction. Even with rising input costs like fertilizer, land remains the scarcest resource. The once-in-a-lifetime nature of farmland sales and unbelievably low borrowing costs are adding fuel to this trend.
Meanwhile, the stock market has some observers hearkening back to last century’s Roaring Twenties. Assuming we stop measuring in fall of 1929 before the Crash, the Dow Jones roughly quadrupled, which is the most frequently remembered aspect of the economic boom of those years. I think it is safe to say that type of value growth is unlikely.
But not all the nation enjoyed good times, especially not agriculture. The boom times for them had passed and were a function of WWI. In fact, the next period of general ag prosperity would not come until the second World War. If we are to have a stretch of good times on America’s farms while the stock market also booms, it would be a historical rarity. Both periods, however, have some similarities. The ag boom of 1914-1920 involved a massive pandemic, overseas crop failures, notably in the Ukraine, and rising incomes for most Americans. The social upheaval of the 1920’s, like Prohibition, widened the economic and cultural gaps between rural and urban America and set the stage for the mass exodus of people from the farms during the Great Depression. The 1920’s also saw the advent of mechanization beginning with automobiles, causing the horse population in the US to peak in 1922 around 20 million.
I think references to the “Roaring Twenties” are popular for several reasons. That period has disappeared from living memory, of course. The images in our minds are largely shaped by the emerging film industry of the day, and factual accuracy was not the of the goals then, and we can’t find any other period that matches up even as well as the 20s which isn’t very similar. My best guess is all of us geezers will be able to “tell this reminds me stories” without fear of correction or interruption, but it won’t help much to prepare for the future.
