What is in this article?:
The 2014 Buyer’s Forecast from Farm Industry News offers insight into the projected prices for seed, crop protection, machinery, fertilizer, land and financing this week. Here we look at farmland prices for 2014.
The rapid rise of land prices has a lot of people crying “bubble,” with some sales hitting astronomical amounts for typical Iowa farmland. Higher crop prices, along with solid yields, bolstered buyers’ efforts to expand their operations, but could things be changing in 2014?
“There are three main factors that have impacted land values: commodity prices, low interest rates and availability of land,” says Sterling Liddell, senior analyst, Rabobank Food and Agribusiness Research and Advisory. Interestingly for 2014, there are changes in at least two of these factors.
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The biggest change is that commodity price increases the last five or six years have bolstered the market. But Liddell says for the first time in a few years, crop stocks may rise. If that happens, prices will soften, which will cease commodity prices as the main driver going into next year. It’s not a bad thing that prices are softer, yet land buyers from outside agriculture may reduce their demand.