TRACTOR PARTS Allis Chalmers Case & David Brown Farmall & International Ferguson Ford & New Holland John Deere Massey Ferguson Massey Harris Minneapolis Moline Oliver & Cockshutt Kubota / Yanmar

TRACTOR MANUALS

Allis Chalmers	Case	Farmall IH	Ford 8N,9N,2N	Ford
Ferguson	John Deere	Massey Ferguson	Minn. Moline	Oliver

Tractor Talk Discussion Forum

Land prices (when is the crash coming.)

Welcome Guest, Log in or Register

Author

Jon Kaiser

01-15-2008 11:52:44

Report to Moderator

Someone asked for something else to talk about so I thought of a question. After working for 8 years on the same dairy farm and slowly building up to 45 milking cows plus young cattle of my own in my bosses herd of 160 I rented a 120 acre place on my own last spring. We rent the house,buildings and the land. This place is worth $600,000-$800,000 I would guess.I know some of you would say to throw in the towel and find something else to do but I didn"t want to be 70 years old and wished that I had tried farming when I was younger. The worst that could happen is that I could go broke and have to go back to working for someone else (boy that would be a strech).The question is will land prices ever come down or are they forever going to go up?

Thank you, Jon K

[Log in to Reply] [No Email]

rustyj

01-16-2008 13:20:55

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

If the Feds get the 40 cents a gallon gasoline tax they are proposing, it won't take long for the yuppies to move back to town to live near their work place!

[Log in to Reply] [No Email]

Huh?

01-16-2008 23:23:44

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to rustyj, 01-16-2008 13:20:55

If they can pay twice what the ground is worth and build a 60,000 dollar horse barn for 3 horses, then I think they can afford the gas.
This is after they bulldozed a nice farmhouse and built a 300,000 dollar job.
So long as there are weirdos and rampant crime in California and a small home costs 600,000, people will continue to sell out and move back to the mid-west and live like kings on 40 acres instead of a 40 x 80 lot. Now the rest of us who get pushed out with their money continue to scratch out a living from even fewer acres yet and will probably never make enough from FARMING THE SOIL to build a new home half the size. Buying ground and having it pay for itself by farming, ranching, dairy or whatever can't compete with easy money these people seem to have. The "value" of the farmland, return on investment, cashflow and all the other terms that everyone has been floating around here don't have anything to do with this situation. It's simply the "haves" againt the "have nots". Or should I say the rich get richer and the poor get poorer. Maybe we need another 30s depression and put everyone back on the same playing field. I know I'll survive on my own fruit, vegetables, beef n bread. The neighbors can eat their horses!

[Log in to Reply] [No Email]

Jon Kaiser

01-16-2008 08:30:10

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

Thank you to all that replied. My FSA loan officer said that $2500 acre for bare land (borrowed) is about the most he has seen that will cash flow even with beginning farmer low interest programs.I don't have the $1000-$1500 to put down per acre and I can see that I am not going to get it milking 45 cows. Land is $3000-$4000 acre here in south east Minnesota for bare land and the building site is worth say $200,000-$300,000 I would guess.I don't have much debt, cows are paid for and not much for equipment. I can't borrow to build more dairy buildings on a rented farm. So I think until land comes down I am stuck. I do agree with those that spoke of the 70's and 80's I was just in grade school but seeing my friends families lose their farms left a life long impression.My grandpa sold the tillable land of his farm to his life long friend and neighbor in the late 70's on a contract for deed.In 1985 they got it back. His farm auction was the first one I can remember going to. His IH 1066 sold for $5,500. I left this part out but we are organic with the land and the cows and shipping organic milk.The cows were organic before we moved and the farm I moved to was already organic with half the land in old hay field. I seeded the rest down to pasture/hay but next year we are going to plant some gain on the old sod. I am buying all my grain and it is a very big bite out of the milk check. I didn't want to start an organic can't be done war I know that it can and you will not convince me other wise.I know people that grow well over 120 bu acre corn and their fields are not a total mess. My cattle have not had any antibiotics for 5 years and they didn't all die nor all get mastitis. My cell count has been less than 300,000 since I moved here. It is just that I feel a little shut out even though I have stuck to my guns all these years. My granpa resold the farm before I was old enough to be taken seriously. He is gone now but I wish he could see that I got this far. Again thank you for all the replies.

Jon Kaiser

[Log in to Reply] [No Email]

James22

01-16-2008 10:53:52

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-16-2008 08:30:10

Organic is fine and can be done if you want to be busy all the time. I just won't want to look at the back end of a cow twice a day, and spend the remainder of the day mechanically killing weeds in everything I'm growing, while trying to wedge in a few days of haying. Alas, also need time to haul the manure.

[Log in to Reply] [No Email]

kyhayman

01-16-2008 07:00:36

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

Business cycles always repeat.

Today's headline is inflation. December inflation up the most in 17 years. Yesterdays headline was economy contracted in December. I posted on here, Monday or yesterday about 'stagflation'. It was the bane of the 70's.

Right now, this week, they federal reserve is having an auction for money. Why? because they cant loan it fast enough. Banks dont want to borrow because people arent borrowing. The more cash the fed tries to throw at the market the worse it will get.

The break will come with interest rates rising. Until the fed raises interest rates to the point that it strengthens the dollar and pushes crude back down. Ultimately, energy is whats killing the economy right now. The only purchase that remained constant in December was energy consumption.

To me, what all that means is somewhere 18-36 months out the fed will have to raise rates to the point we get a correction in the energy markets. The bloodbath in housing should be over by then too. The one two punch of falling oil prices and rising interest rates will kick the legs out from under this land market. I cant see very much ethanol demand at 40 dollar a barrel oil. Crude is way over speculated, after all the dollar dropped in value by half and the price of crude doubled.

I cant predict the day the crash will happen, but I want to have cash on hand when it does.

[Log in to Reply] [No Email]

1936

01-16-2008 05:53:13

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

Leverage borrowing has been the death rattle of many in the 80's. Land is moving up each year with flat spots for short times for correction same as the markets.If the land is not meeting the annual payments without the town jobs and you lose the job OH well you will move on. Think big and buy only what your cash flow will cover. Right now JD stock is hot when it go south be ware.

[Log in to Reply] [No Email]

Mark - IN.

01-15-2008 21:20:22

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

Jon, I don't know the answer to that. Time will tell, speculation won't. Speculation drove Wall Street to obscene highs, and speculation is driving a market into weak territory. Speculation is standing in a trading floor pit today, buying for one year from today. I've stood on the catwalks looking down on the trading floors and watched guys be carried off, loaded in ambulances and hauled away...from speculating for one year from the day that they were trading. Just a dumb phone guy that doesn't miss that atmosphere (the wimmins were hot though - chuckle). I'm never going to advise someone to or not to play it safe. My best advice would be for you or anyone to figure out your own value, what you think that you're capable of, and then make a decision from there, and live with your decision.

Speculation can and has killed men early.

Good luck in your decision, Jon.

[Log in to Reply] [No Email]

RodInNS

01-15-2008 20:43:54

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

I dunno.... but I thinka depression is coming that will make 1929 look like a walk in the park.
I think most things are pointing to a big credit crunch before too long. Times are going to get a lot harder, and I don't see that oil will come down much, if at all. China is driving the price of oil, steel and most other commodities today. They're building the infrastructure that North America built 100 years ago, and trying to do it the same way we did.... with OIL. As long as they have the money to keep financing that, they'll keep going, and the price of all of those commodities will stay high. That won't leave much room for us to move and recover...
This is going to be anothe BIG round of the rich getting a lot richer and the poor getting a lot poorer. I don't see that being indebted to land is going to help anyone survive. MAbey having a wad of cash to buy after the crash would be of some benefit though.
I don't have a terribly optimistic outlook on this... The crunch is coming.

Rod

[Log in to Reply] [No Email]

James22

01-16-2008 08:00:15

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to RodInNS, 01-15-2008 20:43:54

Yes you are correct, the wealthy continue to be getting richer and the poor might not be getting poorer, but there are a lot more of them. The actual inflation rate is much higher than the reported 2-3%, more like 7%. As a result any dollars you hold, are rapidly loosing buying power. Hard assets such as oil, metals and land are your refuge. If the big crunch comes they will only print more money, causing hyper-inflation, making your hard assets look even better. Personally, I hold too many dollars and am actively looking for more land which is not priced near/at the current peak.

[Log in to Reply] [No Email]

RodInNS

01-16-2008 14:00:40

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to James22, 01-16-2008 08:00:15

'Tis one thing if you've got the dollars; quite another if you're working with someone else's dollars...
I'd sooner sit on cash when the crash comes than a big loan I couldn't pay. I think you'll also see a devaluation in the land over the short term too. If nobody has money to buy, the value will go down.... So if you HAVE to sell, you still lost the investment whether it was liquid or in a hard assett. All depends on where you're at in your own situation.
I'm not going buying land or anything else on credit, that I do know.

Rod

[Log in to Reply] [No Email]

Ford Man

01-15-2008 20:07:12

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

I bought a little over 50 acres back about 1990. I paid around $ 540 per acre.It was part of a family estate that had not been settled since the 1950s.I had to buy out all of the heirs. A lot of the land is in 100 year flood plain and very little is worth farming at all so that was probably a pretty fair price at the time.At the most, it may have been worth $ 1000 per acre.

Now, the bank tells me it is worth $4000-5000 per acre.I would not sell it for that but I sure would not pay that for it either !

I think $ 2000-2500 is probably fair.

This land has been in my Mother"s family since the late 1700s so it has a great deal of meaning to me.

Anyway, my wife and I built a nice house here last year.The difference between us and the normal people that move to the country is that my wife is from the country and I spent a lot of time in the country when I was growing up.I have played on and hunted this land my whole life and my wife and son fell in love with it also.We are about 1/4 mile off the road and have lots of privacy.

I have known our neighbors for my whole life and they are super folks and they would do anything for any of us.When we moved here, we made sure that we respected our neighbors.

Now on the other hand, I know some folks who bought some land in another part of the county and were tickled to pay $ 7000 per acre !

They built a couple of huge houses and like to talk about how they have 27 acres so they have more clout than anyone around them.

I have 50 acres and feel very fortunate. I just happened to luck into the whole thing.I am really a small player around here.Most of my neighbors have a lot more land than I do.No one around here make a big deal of it. We all respect each other.

Its the people who move out here and try to take over that are ruining things for the rest of us.

Ford Man

[Log in to Reply] [No Email]

JoshuaGA

01-15-2008 19:50:22

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

Something's gotta give, but where? In the midwest, if corn came back to $3 and beans back to $8-9, you would see people hurting. In the southeast, we have been a little more insulated. Highest land I've heard of so far was a 100 Acre irrigated farm sell for $4100 an acre. Heck, our land, at that price without improvements except irrigation (240 Acres) would be worth almost a million dollars, and tack on another half million with the chicken houses. I don't understand how such an inflated price can be held, especially when you need one farm to pay for another, or when you are basing repayment plans on historical highs instead of historical averages. :? Makes it very hard to break into farming, especially if starting from scratch. Even good used early model equipment gets expensive in a hurry. Then again, my biggest complaint with leasing is why keep paying rent when you can buy. I would only advise renting or leasing only when you are questoning the capability of the land or the resources. Go talk to an ag lender about land. They hear it all, they knows what works locally, and they can help you pencil out your finances.

Think outside the box. Could you establish or join a specility market? Instead of selling to the coop, could you market your product yourself somehow? Sell organic? Maybe produce a different product? Instead of dairy cows, dairy goats? Could you add a second revenue source? Instead of selling bull calves, finish them on grass and market as grassfed beef? If you have a good calf rearing program, could you handle custon growing a few extra calves for local daries? Sell your bull calves to local 4Hers and FFA instead of at the local sale barn? Sell breeding stock? Maybe have a backyard flock of chickens that you could collect eggs to sell?Could you use buildings more effectivley? Are the buildings still good, or do they need to be remodeled or replaced? Are they worth your wile? Are there any more efficiencies that could be utilized? How about your cows? Are they productive? Do they utilize feed effectivley? Do they score well? How is the land? Is it flat, or does it roll? Is the land productive? Is it erosion prone? Is the land in permanant pastures, in cropland, or a mixture of both? How is your management style? Are you a gogetter, or do you wait and see? Are you proactive or reactive? Are you frugal or lavish? These are all questions to consider. I'm sure you know way more about your situation than I do from your post. I hope you can be sucessful as a farmer. It is a wonderful, but stressful, life. I know my post isn't necessarily related to yours, but I thought I would try to help. It takes a sharp pencil to make a farm budget. As our banker said, "don't farm harder, farm smarter." HTH

JoshuaGA

[Log in to Reply] [No Email]

MOMassey

01-15-2008 18:03:00

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

We have more outside influence in land prices than we did in the past from people buying land for recreational purposes. JohnMO stated that people are buying land based on what the payment is and not how much it cost. This is true. We will find out if they can really afford these "farms" when crunch time comes and it is a choice of making the house payment or farm payment.

dhermesc said that very little farmland was involved in the subprime mess. How do you think some of these urban buyers financed the down on the rural property? By using the equity in their homes.

Believe it or not, the health of our economy is based on the price of crude oil. When crude is cheap, we have a boom. When crude is high we have a bust. We're fixing to have a bust. I really hope I'm wrong on this.

[Log in to Reply] [No Email]

pair-a-dice farm

01-15-2008 17:54:08

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

I was a put out of farming in 1984 because of falling land prices. I had never missed a payment but the bank said that I owed more than it was worth and called my note. I know of land that had been bought for $1000 and acre in 1978 and was sold in the early 80's for less than $300. I don't know if this will happen again but I would want enough equity in it to weather any "adjustment"

[Log in to Reply] [No Email]

730virgil

01-15-2008 17:39:28

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

1400 acres sold about 20 miles from me for 6000
per acre. thing that drives land prices here is people coming here from chicago area. some of them are farmers that have been pushed out because of development. some of these people want to keep farming but hard to do there. the people that bought 1400 a plan to milk 10,000
cows.they are coming here from ca. as they are finding it almost impossible to keep dairying
in ca. town where mrs 730 grew up was about 3000 people
is pushing 30,000. the only reason it hasn't got bigger is no place for more as malls and streets growing like weeds.

[Log in to Reply] [No Email]

T_Bone

01-15-2008 17:29:04

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

Hi Jon,

A $250k investment in "C" (Citi Bank) will yield $17k/yr in dividens this year.

In less than 3yrs your "C" networth will be $750k and yield $34k/yr plus income.

If a person wisely chart traded the stock on the way back up, you'll greatly increase your investment networth//income to more than $750k.

Go research what happened in Aug 1990 to see the results. History does repeat it's self.

And you wanna be a farmer?

T_Bone

[Log in to Reply] [No Email]

Eric SEI

01-15-2008 20:36:17

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to T_Bone, 01-15-2008 17:29:04

I wouldn't bet on those dividends from Citibank. They just got a $20 Billion infusion of new equity from overseas in order to stay in business.

[Log in to Reply] [No Email]

T_Bone

01-15-2008 21:12:10

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Eric SEI, 01-15-2008 20:36:17

Hi Eric,

It's not the dividens that will make the money. It's the stocks fire sale price that will make a person a killing.

C's networth is $160b as of today. They made $34b overseas. It's just the US banking part that is hurting.

Bank of America is probably a better buy as they didn't cut dividens in 1990 like C but dropped like a rock like C. We'll see tommorrow after earnings are posted.

T_Bone

[Log in to Reply] [No Email]

kyplowboy

01-15-2008 17:24:52

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

I do not know if ground is going to crash or not. I do know that farm ground prices have crashed in the past. I was too small to remember but I know land around here fell fast when many of the farmers round here went broke in 82 and 83. I do not think that the price will double here in the next 10 years like it did in the past ten. Greed is running land prices up here. Developers, hobby farmers from town, same as every where. I don"t see how prices can keep climbing like it has.

Dave

[Log in to Reply] [No Email]

Bill in Colo

01-15-2008 16:57:57

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

Good irriagated hay meadow here brings 4000 per acre anything else will bring 1000 to 1500.
Three things drive the price of land here first is recreation by the fortune 500 individuals at least 10 with seat on the nyse or comodity markets have ranchs and homes in the area, two the fact that only 25% of the land is in private ownership the rest is National Forest and BLM.Three a very robust enery industry oil,gas and coal

[Log in to Reply] [No Email]

44 massey

01-15-2008 17:01:45

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Bill in Colo, 01-15-2008 16:57:57

Some good irrigated cropland about 5 miles from me here in ne nebr just sold for $3850 last week!

[Log in to Reply] [No Email]

jayinNY

01-15-2008 16:12:36

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

No land will keep going up, hasent it always. People today dont care about farming. They live in 500,0000 dollar houses, on a 1/8 of a acre right on top of there nighbor. Developers buy the farms, chop them up into sub-divisons, and sell the lots with house for 250 to 500 thousand a piece. Not a bad investment right? But what happens when we have no more American soil to grow food on? Eat lead based china made tomatoes. There already poisoning our kids in there toys, so let have them poison us too.

[Log in to Reply] [No Email]

1206SWMO

01-15-2008 16:00:46

Report to Moderator

How Quickly People Forget The 1980's in reply to Jon Kaiser, 01-15-2008 11:52:44

I've read every reply on here and it looks like some have already forgotten the 1980's.Try telling the 100's of thousands of farmers that went busted in the 1980's that land values will never go down.20% interest and drought killed everyone in my part of MO.Neighbor after neighbor is no longer farming.

Land here peaked at $1200 per acre here in 1980 and by 1987 it was selling in the $400-600 range.I watched a neighbors 320 acres sell for $350 on the courthouse steps.I bought land in 1979 for $1100 and in 1988 it was valued at $550 per acre.The best of farmers around here couldnt afford land in the late 1980's as most barely survived.Lots of bankruptcies were filed and many write downs were given.

Farm land has went up every year here since 1987 and is now in the $1500-2000 range.Only the very well off can now afford it.Those that are buying land around here own 1000-3000 acres free and clear.

Click the link below to see what farm land did in Illinois in the 1980's.In 1980 it was worth $3932 per acre and fell clear down to $1706 per acre in 1987.

Land may still be a good buy if you can make a substanstial downpayment and have other sources of income for hard times.

If we have a severe recession or a depression land values will fall.What would 20% interest of the early 1980's do to our current faltering economy?

1980's Illinois Land Values

[Log in to Reply] [No Email]

Hugh MacKay

01-15-2008 16:42:22

Report to Moderator

Re: How Quickly People Forget The 1980's in reply to 1206SWMO, 01-15-2008 16:00:46

Amen, they also forget bankers calling loans, not because farmers were in arrears, but rather because the farmer no longer had equity. He no longer had equity because of deflation in land value, coupled with 20% interest. Your figures aren't quite the same as here in Canada, but the rate of fall in land value was about the same, roughly 50%.

Like you I have read every post in this thread, and I ask how many of the respondents can afford a 50% drop in land values. Farming is one of the biggest gambles of a persons life, I do hope you guys, know when to hold em, and when to fold.

[Log in to Reply] [No Email]

James22

01-15-2008 18:31:29

Report to Moderator

Re: How Quickly People Forget The 1980's in reply to Hugh MacKay, 01-15-2008 16:42:22

I purchased a fairly large tract less than 5 years ago and still would be ahead if it went down 50%. Also believe nearly all the farm ground held today is held by parties in strong financial condition, the fallout from the early eighties caused the bankers to be a lot more conservative. Therefore I wouldn't base my farming future on having a big downturn in real estate prices. For undeveloped residential property the story isn't so pretty, the banks threw money at housing, but even with a 50% retraction it would still be entirely too expensive for farming.

[Log in to Reply] [No Email]

MOMassey

01-15-2008 16:00:20

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

I read some of the posts below and they remind me of things people were saying in 1979. Things like "there not making any more land".

We are in a very similar economic situation to 1079. Energy is at an all time high, grain prices are at an all time high, credit has been easy to get and loans have been made with no basis in cash flow.

Land prices will go down when grain prices go down. Grain prices will go down when oil goes down. Oil will go down again - the current price of crude is based on speculation, not supply and demand. The lowering price of oil crushed the ethanol business in the early 80's. We should have done all we could to keep the ethanol industry afloat back then. We would be way ahead of the curve now.

We have seen this before. Are we smart enough to see the signs and prevent a repeat? It doesn't look like it.

[Log in to Reply] [No Email]

Question?

01-15-2008 19:48:08

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to MOMassey, 01-15-2008 16:00:20

Where, in the US, is ANYONE making more land? You state the current price of crude is based on speculation. Have you heard of China and India and their booming economies? Those two countries alone are keeping the oil price up, it's simple supply and demand. Yes, there is some speculation but it only adds a few dollars per barrel.

[Log in to Reply] [No Email]

TomTex

01-15-2008 15:44:24

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

Land prices around here are driven by Fort Worth/Dallas metroplex growth, and even more by the "horse people". Parker county is called the cutting horse captial of the world. When the horse people buy a piece of land, they really clean it up, build pipe-top fences, sprig coastal bermuda, trim all trees. Really making the county look good. With my health issues looming, I may be looking for a horse man to buy me out in another year or two. Faairly good land on paved roads going for 8000 to 13000 an acre. Very little farming left in this area, nearly all city folks commuting and the incoming horse folks. My taxes on house alone is over 4000 per year. All land except one acre under house is only taxed at agricultural use, or I would be out immediately. Tom

[Log in to Reply] [No Email]

coloken

01-15-2008 15:34:50

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

Land will never go down unless people stop having babies. and/or -- the government stops spending money--NEVER!

[Log in to Reply] [No Email]

rodgernbama

01-15-2008 15:05:21

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

I agree with mjbrown. I don't think land prices overall will go down unless we have another Depression. They may stay flat awhile. Around north Alabama the price per acre has doubled in 10 years and in some locations even more due to developers. They drove my property taxes up when they started developing property around me. For 20 years it was just soy beans or corn now its houses.

[Log in to Reply] [No Email]

Paul from MN

01-15-2008 14:29:09

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

I don"t think land prices will crash, but can see them coming down a bit. Although I think that location will make a huge difference. Quality farm land that is far from any significant population center will be unchanged. I do think that the value of commuter ranchettes will come down. With the cost of fuel going up and no end in sight to how high it will get, a lot of those folks driving an hour each way to work will get tired of the fuel expense. That will drive down demand and the price along with it.

Dave in MN, that might help in your area. I can"t imagine it doing anything to the folks commuting to St. Cloud, but I bet there are a lot less folks who work in the cities looking to build there.

[Log in to Reply] [No Email]

Homesteader

01-15-2008 14:26:49

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

I"d like to ask an additional question, prompted by many of the earlier replies. Many of you mention that land has quadrupled in price, from $1000 to $4000 over a fairly short time. That"s pretty close to the case where I live, too.

But is it that the land itself has increased in value, or has the dollar lost that much value? It has always seemed tough to determine the actual value of anything when we express that value in terms of a currency that isn"t tied to anything. Just pondering out loud here, but I"d be interested in what you all think.

[Log in to Reply] [No Email]

MTC

01-15-2008 14:18:59

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

Jon-corn today in Wi. is 4.70.Soybeans are 12.00.I sold some corn at harvest for 3.50 now 1.20 higher.I sold some soybeans at harvest for 9.03 now almost 3.00 higher.What do you think that will do to good ag land?It has only one way to go--up.Just my 2 cents worth.Mike

[Log in to Reply] [No Email]

Dave from MN

01-15-2008 14:17:46

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

I am hoping for a downward trend on farm land prices myself, but have found that isnt gonna happen. Sure there is cheap land out there to be bought, from people who are in over their heads, foreclosures, or just people selling off because they dont need it, but dont know what is worth. You either need to be related to them to get the deal or forget about getting it, developers and such are justwaiting in the shadows with the cash all ready to pounce on it.

[Log in to Reply] [No Email]

Dave H (MI)

01-15-2008 14:13:09

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

As near as I can tell, the only people who think land is still worth today what it was worth a couple years ago are the people who are trying to sell it. Have you ever tried to explain to a guy who has had 80 acres on the market for 3 years or more that it might, just possibly, be a wee little bit overpriced? Don't waste your breath.

[Log in to Reply] [No Email]

Polkwing

01-15-2008 14:00:19

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

I'm no farmer but recall what Will Rogers once said about land: "They ain't making any more land!"

At the rate of gobbling up good farm land for housing, commercial development etc etc you think chances of land prices will be going down?

My uneducated guess is NO WAY!

Wish I could be wrong for any who want to stay in farming and feed the world.

Polkwing

[Log in to Reply] [No Email]

Tradititonal Farmer

01-15-2008 13:53:30

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

Land and housing have gone up dramatically in the last 5 years because the Banks and the Feds have been pumping money into the economy like crazy.Now a total reversal is taking place the money supply is drying up banks are writing off Billions in bad loans and there is a backlog of unsold houses in most places.If there is a general recession and not many people have much money all prices will drop including land.

[Log in to Reply] [No Email]

Michael Soldan

01-15-2008 13:52:36

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

Jon, I was just listening to something on the radio in the truck today, there's over seven billion people in the world and this radio host was wondering how they are going to get fed...farms, farmland have a future, in my mind farmland will always increase in price, I have never seen farmland drop in price, I've seen land sold during hard times, but it always increases in price, in my 60 years I've never seen anyone lose money by buying a home or a farm and holding onto it for several years. people can lose a home or a farm if they don't pay the mortgage, but that property will always gain in capital..my opinion

[Log in to Reply] [No Email]

1206SWMO

01-15-2008 18:12:32

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Michael Soldan, 01-15-2008 13:52:36

You must live in an urban area where the development land never has fallen in price.

Out in farming country in the mid 1980's land fell like a rock down to as low as 50% of what it was worth in 1980.My county led the state of MO in farm foreclosures in the 1980's.

My grandfather farmed in central Kansas during the 1930's and bought land from his neighbors during the great depression for a bargain price.

[Log in to Reply] [No Email]

J Kemp

01-15-2008 22:05:42

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to 1206SWMO, 01-15-2008 18:12:32

$3850 is the lowest price around here ,,.. And YOU GOTTA SMOOSE the developers to Allow a poor Farmer to get it ,, Hey Blaine ,could you find Us a Nicwplace to farmin Your Area ,, These city folks that are taking over this area are .,are ,nuts

[Log in to Reply] [No Email]

1206SWMO

01-16-2008 17:41:53

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to J Kemp, 01-15-2008 22:05:42

There is land for sale all the time in this area.720 acres just sold not that far from me for around $1800 per acre.Its been in hay and grass for years but lots is nearly level and will be farmed.Its 2 miles from town

My brother has 120 acres for sale.

A 3000 cow NZ dairy came in here 3-4 years ago and bought well over 3000 acres.They spent nearly 20 million dollars and I hear they are in trouble now.

In the next few years alot of large farmers in this area will be retiring and have no one to follow them.

[Log in to Reply] [No Email]

Hugh MacKay

01-15-2008 16:21:41

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Michael Soldan, 01-15-2008 13:52:36

Michael: Not so, in 1983 there were hundreds of forclorsures across Ontario, against farmers who were not one penny in arrears, farmers with a perfect repayment record. The banker determined they had lost their equity, therefor called the loans, most of them due and payable in 30 days.

[Log in to Reply] [No Email]

John (MO)

01-15-2008 13:23:12

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

No crash in land prices coming. I"ll be really surprised if there is even a 10% correction.

So let`s just say that you could get the place for about $720,000. You maybe could borrow $600,000 of that if you had $120,000. to put down. The payments are going to run you around $3,500. a month or $42,000. a year, and I`d think other expences will at least equal that amount. You`d also want to be able to pocket around $30,000. a year with that kind of investment of money and labor. So, is there $115,000. a year to be made out of that ground, with the herd you have? Can you handle a bigger herd on that ground, and will the facilities handle the load? If you have to buy more cows or rent more ground all the expenses go up too.

I"m not setting in your chair, but from here it looks to me like a pretty sure and short trip to going broke. Which in my opinion is a pretty darn bad worst case. Now if I`m wrong and land prices change, say 30% down turn, while interest and everything else stays about the same... then... maybe...

[Log in to Reply] [No Email]

Steven f/AZ

01-15-2008 13:21:45

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

I paid the equivalent of $245,000 per acre for my lot in town last fall...

As much as the houses have gone down, the bare land prices have stayed steady due to lower carrying costs vs. the houses.

[Log in to Reply] [No Email]

GeneMO

01-15-2008 13:05:59

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

$2500 an acre here in central MO. for "rough" ground. Hunting and recreational land is worth more than farm ground.

Neighbor bought 52 acres of brush next to me 10 years ago for $1000 an acre and I thought he was crazy. Now he could get $4000 per now since it is a smaller acreage.

My son wants to buy a couple hundred acres of farm ground, but has a new baby. I think he will try it, but he makes good money working in Deere's corporate office.

I's kinda hate to be starting out now, but I guess you gotta get in there.

Gene

[Log in to Reply] [No Email]

Jim Joanie

01-15-2008 14:13:11

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to GeneMO, 01-15-2008 13:05:59

As Gene mentioned, 10 yrs ago land was 1000 an acre, now 4000 an acre.

Bought my 40 in 1999 for 747.00 an acre, now running close to 4000 an acre. Only wish I had been smart enough to say the hell with a 401K, cashed it out, bought the 60 next to mine for 70k. I would have had a hell of alot better return. 29,900 grew to 120,000 market value.

Looking at a 30 next to my house that is up for sale, about 23 tillable. They are asking 99,900 but might come down. Like they say, they aint making land, and next to the house how much better can it get?

[Log in to Reply] [No Email]

Ray

01-15-2008 14:27:51

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jim Joanie, 01-15-2008 14:13:11

In west central ohio we are seeing farms sell in the 6000 to 9000 per acre range.I've got a 100 acres i'm going to auction in early spring.

[Log in to Reply] [No Email]

John (MO)

01-15-2008 13:47:22

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to GeneMO, 01-15-2008 13:05:59

It seems that many city buyers don`t know an acre from a section. Size just don`t make much difference, to them. What does make a difference is how much the payment is, and if they think there is a big buck that can be shot on the place. LOL

City folks just bought 13 acres next to my farm. I hear they gave close to $40,000 for it. They had a little 1 room cabin hauled in and had to set it on the county road right of way because there wasn`t a level enough place on the rest of the land, which by the way had been logged out just a few years ago. LOL

Me and the other neighbor to the land just shake our heads. Neither of us would have given $200. an acre for the place, let alone $3000. It is worthless ravines, good for nothing but firewood, IF you pull it up the hills with a cable. But, it wouldn`t surprise me a bit if the current city folks couldn`t find another city buyer to give them a 50% profit. Simply because the next person can afford that payment.

So, who are the real fools? It seems more often than not I`m at least in the running...

[Log in to Reply] [No Email]

James22

01-15-2008 13:05:20

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

I don't believe land prices will retract much if at all, and there is a greater chance they will continue to escalate. The problem with potentially ridding a dead horse for a profession is that you will be quite a bit older if/when you start over. The ship providing any reasonable retirement age will have set sail a long time ago and it is not fun scratching out a living after the age of 65. Better to start small and carry a off-farm job which will provide a retirement if farming tanks. I consider an off-farm job a good insurance policy.

[Log in to Reply] [No Email]

dhermesc

01-15-2008 13:18:59

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to James22, 01-15-2008 13:05:20

"I don't believe land prices will retract much if at all, and there is a greater chance they will continue to escalate"

I would agree. If anything the price of production land will increase even faster with the deflating value of the dollar.

[Log in to Reply] [No Email]

I don't have a name

01-15-2008 12:57:14

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

Some folks think the economy might totally crash. Right now County Wide is the biggest mortage lender in America and they are in trouble with all the subprime morgages, and they had borrowed a lot of money from Bank Of America which is the largest bank chain in the United States, so Bank of America has bought out Country Wide and is attempting to save it because if Country Wide goes under, so will Bank Of America because they had lent all that money to them. The real estate bubble has burst atleast for now and between the morgage crisis and deflating values hardly anyone is buying, so people are losing serious money all over the country with these homes they can't get sold and their equity is disappearing. Also it is predicted the stock market bubble might burst as well in the coming months. Lets not forget higher oil prices to come as well. It is predicted that if all this happens we will see a depression far worse than 1929.
Personally, I don't see how land could double and triple in price from what it is now because its already to the point where people can hardly afford it. inflation has been outpacing wages for awhile now. Back years ago people bought their farms cheap and during their farming careers land went up up up, making them millionaires, but I don't see this happening again.

[Log in to Reply] [No Email]

dhermesc

01-15-2008 13:22:11

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to I don't have a name, 01-15-2008 12:57:14

Very little farm land was included in the sub prime mess. Lending practices on farm land never approached the craziness that was allowed/promoted with home loans. If anything land prices are about to take another leap - especially with grain prices doing what they are doing.

[Log in to Reply] [No Email]

Mike M

01-15-2008 12:23:32

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

Very likely they are about at there lowest now. Plus all the overseas oil barons have barrels full of money to spend so maybe they will be buying too. They won't need to take us over they can just buy us out.

[Log in to Reply] [No Email]

mjbrown

01-15-2008 12:18:16

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

I'd be surprised if land prices "crashed". It would take an economic meltdown like the Great Depression for it to happen. They might plateau for a while.

[Log in to Reply] [No Email]

RustyFarmall

01-15-2008 12:14:36

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

Eventually I think prices will have to at least level off. I think the main thing that is driving the price up right now is the demand for land for developments, and since the housing industry seems to be in a bit of a slump right now, maybe the demand for development property might diminish? Don't know. It's pure speculation at this point.

[Log in to Reply] [No Email]

Gun guru

01-15-2008 12:10:05

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Jon Kaiser, 01-15-2008 11:52:44

Come to Michigan where home prices have dropped about 25% in the last 4 years and land prices have dropped too, depending on howmuch land you have and where it is located. Our silly *itch governor has no clue on how to create jobs or build business, she only knows how to tax people. (God I hate her).

[Log in to Reply] [No Email]

hayray

01-15-2008 17:04:34

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Gun guru, 01-15-2008 12:10:05

Gotta agree with ya there. There is a 80 I lease that is now on the market and is now price at 2/3rds what it was sold for 4 years ago.

[Log in to Reply] [No Email]

rrlund

01-15-2008 13:28:27

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to Gun guru, 01-15-2008 12:10:05

Gotta agree with you about the last part,the governor. But,the values that have dropped are residential and commercial. Farm land near a dying city has lost it's development value,but as far as farnland values themselves,we're not going to drop to $500 per acre if the average nationwide is $3000 for example. Folks like the one who made the original post would be here in a heartbeat buying if that happened,and those with land for sale know it,so they aren't going to drop the price. Farmland might not be a global economy,but it's for sure a national thing.

[Log in to Reply] [No Email]

01-15-2008 13:57:26

Report to Moderator

Re: Land prices (when is the crash coming.) in reply to rrlund, 01-15-2008 13:28:27

Productive farmland brings income from sales of products- sales not restricted to Michigan local area for corn and soybeans, cattle, hogs and chicken. Hay might be more influenced by local economy because of shipping costs. Local residential and commercial losses around Detroit area understandable- if you have to drive an hour to work paying $3.20 a gallon you end up moving toward job. Farm you step to barn and you're at work. (This is Udder Nonsense from Wisconsin, dairymen get the pun). RN.

[Log in to Reply] [No Email]

[Options] [Printer Friendly] [Posting Help] [Return to Forum] [Log in to Reply]

TRACTOR PARTS	TRACTOR MANUALS

We sell tractor parts! We have the parts you need to repair your tractor - the right parts. Our low prices and years of research make us your best choice when you need parts. Shop Online Today. [ About Us ]

Home | Forums

Copyright © 1997-2023 Yesterday's Tractor Co.
All Rights Reserved. Reproduction of any part of this website, including design and content, without written permission is strictly prohibited. Trade Marks and Trade Names contained and used in this Website are those of others, and are used in this Website in a descriptive sense to refer to the products of others. Use of this Web site constitutes acceptance of our User Agreement and Privacy Policy

TRADEMARK DISCLAIMER: Tradenames and Trademarks referred to within Yesterday's Tractor Co. products and within the Yesterday's Tractor Co. websites are the property of their respective trademark holders. None of these trademark holders are affiliated with Yesterday's Tractor Co., our products, or our website nor are we sponsored by them. John Deere and its logos are the registered trademarks of the John Deere Corporation. Agco, Agco Allis, White, Massey Ferguson and their logos are the registered trademarks of AGCO Corporation. Case, Case-IH, Farmall, International Harvester, New Holland and their logos are registered trademarks of CNH Global N.V.

Yesterday's Tractors - Antique Tractor Headquarters

Website Accessibility Policy