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Originally Posted by Tylerthigpen!1!
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.
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The vast majority of farming done (in my area, anyway) is done by owner-operators. There are some lease and share-farm arrangements; however, with the fall of lease prices, the value/price of land must also follow.
Right now, land sales are sparse, and when they do occur, they are done with historical crop prices in mind. When these farmers are forced to liquidate, either in an effort to payoff operating carryover or through foreclosure, a lot of land will hit the market simultaneously. Valuations must then adjust to make economic sense, based on a cap rate and operating cash flows going forward. When this adjustment hits, it will be significant.