Quote:
Originally Posted by Nightfyre
Personally, I feel a significant financial event will happen in the next two years based on the strength of the US dollar and weaknesses in the global economy. Specifically, a reckoning is coming to agriculture in the US. Due to the operating cycles, agricultural operations typically take bad years like this year and use equity to shore them up. However, land prices haven't dropped significantly yet despite the significant drop in commodity prices. As soon as the land prices start to correct, the equity in farm operations will no longer be in place to support carrying over bad years. As a result, liquidations will start to occur, further driving down land prices, further evaporating equity in struggling operations, forcing another wave of liquidations.
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What makes you think that the land prices will correct? My understanding is that land is now owned by folks wanting to preserve theor wealth, not by the farmers.