It's too early.Well, La Niña is dawdling in its arrival, so no help from the weather to reduce bin-busting harvests, commodity prices continue their downtrend and land prices follow at a respectful distance.
Even though we think we'll see some upward price pressure [on crops] come late summer, after a meandering downtrend, the reality of farmland investment is that it is only worth a multiple of the cash flow.
(unless you're on the edge of a metro area and have some non-public zoning info)
US farmland prices are heading for a third successive year of decline, amid worries for farm finances stoked by the drop in prices of major crops to multi-year lows.
A farmland price index compiled by Creighton University, from data in agricultural states from Wyoming to Missouri, showed some improvement in the US farmland market this month, rising to 30.3 from a figure of 25.6 in August.
However, the reading remained "frail", and well below the 50.0 level which indicates a neutral market.Indeed, it represented a 34th successive month of sub-50.0 figures, with the data showing only Colorado among the states covered seeing a reading above that threshold, signalling a rise in prices.Incomes dropThe continued market decline comes amid growing pressure on farm finances prompted by crop price weakness, with Chicago corn futures hitting a seven-year low last month on a spot contract basis, and wheat futures their weakest in a decade.The US Department of Agriculture has forecast US net farm income falling 11.5% this year to a seven-year low of $71.5bn, fuelled by a $25.7bn decline in cash receipts from commodity sales/"The decline reflects falling commodity prices, an effect only partially offset by an increase in production," the USDA said.Creighton, whose data are drawn from a survey of lenders, reported that Illinois banker Jim Eckert, "expects lower agriculture commodity prices to cause all but the best capitalised producers to only break even, or lose money, for 2016"....MORE