| reformedbanker - 5/31/2023 06:50
Short term, lower commodity prices will likely bring rents down. Land would soften at auction but lag.
Long term, I'm probably in the plateau / slightly up from here camp. I'll change my mind if another ethanol revolution comes around that creates immense new demand. Conversely, if we lose ethanol demand, land gets hurt badly.
3 years of drought, a war market, helicopter money have created a frothy market. I am not calling it a bubble though. Just my 2 cents.
Well, if your afraid to call it a bubble, I will. Hard to envision any scenario where gross receipts are off by one third since last falls off the combine price for corn, compared to new crop offerings, and increase the interest rate by 2 1/2 times, without a VERY significant adjustment to price of underlying asset. Current economic fundamentals would appraise a 200 aph tract at $6,000 acre. That’s the underlying economic base. Everything above that is blue sky. |