“Economists say farmland values are getting a boost from corn and soybean prices, which had reached records highs because of the drought.
Farmers are carrying less debt than they were 30 years ago, and low interest rates are also a factor because they make it less costly for farmers to borrow. The federal crop insurance program also plays a role in keeping farmland prices high, by covering a majority of losses in revenue or crop yields.
Regulators, however, say that despite the continued growth in farmland prices there are reasons to be cautious. Some lenders have reported that a number of farmers are taking out loans based on the current value of their land to take advantage of the farmland boom.” (New York Times)
If it’s a bubble, Farm Aid becomes a federal department. If it’s not, farm subsidies continue anyway. Almost as good a gig as driving an investment bank into the ground.
FEE Timely Classics
“U.S. Agricultural Programs: Who Pays?” by E. C. Pasour, Jr.
“Farm Land and the Free Market” by Kelly Ross
“The Farm Problem and Government Farm Programs” by E. C. Pasour, Jr.