The future of land values is a pressing concern, especially with the current market conditions. But will the presence of bushels in the bin be enough to maintain high land market values? This is the million-dollar question for many farmers and investors.
Here's the deal: The Steffes Group, a renowned auction house with decades of experience, has identified three critical indicators that significantly influence land and machinery prices: commodity prices, interest rates, and crop yields. These factors have been their guiding stars for 65 years.
But here's where it gets interesting: government policies are now a new player in the game. Direct payments linked to disasters and trade disputes have become a significant factor in the land market equation. And this is the part most people miss—the impact of these policies can be both a blessing and a curse.
Currently, the market outlook is uncertain, but there's a silver lining. The author believes that bushels can indeed provide some stability. After all, a harvested crop, whether good or bad, gives farmers a sense of security about their immediate financial future.
The auction strategy: The best time to sell a farm, according to the author, is right after the harvest and before the next planting season. Why? Because knowledgeable bidders prefer certainty. When the crop is still in the field or yields are uncertain, bidders often get cold feet, which can negatively impact auction results.
Despite low commodity prices, the author argues that other factors will prevent a significant market correction. The administration's use of tariffs to support farmers and the potential for trade deals to boost commodity prices are seen as stabilizing forces.
Controversial Take: If you're expecting a major shift in farm real estate values, think again. The demand for farm and ranch land is too high to allow for a substantial drop in prices, according to the author's auction block insights. So, should you dive into the market? The answer is a resounding yes, if the conditions are right for you.
The appetite for land, regardless of its type or quality, is insatiable. From pasture to tillable land and even recreational tracts, there's a flood of cash waiting to be invested. But will this trend continue? That's a question that sparks debate and one that we'd love to hear your thoughts on in the comments below.
