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Editor’s pick: U.S. farmland values falling

The Wall Street Journal reports that U.S. farmland is following the rest of the real estate market by posting the first declines since 1987.

The Journal reports that U.S. farmland fell to an average of $2,100 an acre, down 3.2 per cent from a year earlier, according to a report by the USDA.

The report cited inflated land prices due to the red hot corn and soybean markets last year, along with growing interest in ethanol, which led to speculators and investors being attracted to farmland. Now the USDA says the deflation of the commodity market and the overall weak economy is beginning to trickle down to the farm economy as well.

Analysts cited in the report said this wasn’t necessarily bad news for the sector however, and that it could mean the markets were becoming more rationale.

The report also said the pain wasn’t necessarily evenly shared. Grain farmers were benefiting from grain prices that still remained relatively strong compared to historical prices, while the Mountain states where livestock production is king saw a bigger hit as the sector felt the pressure of lower cattle prices and higher feet prices. 

 

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Glacier FarmMedia, a division of Glacier Media, is Canada's largest publisher of agricultural news in print and online.

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