Real Estate Boom

I was driving from Harrisburg, PA, to Fort Wayne, IN, often trekking off the interstates to get a feel for rural America as I was conducting a seminar series for Monsanto. Stops at the coffee shops and informal visits with agrilenders find that land and cash rents are extremely strong.

This is partially a result of the newly passed Farm Bill. However, some pressure on land values is coming from investor flight from Wall Street into farmland and second, even third, homes. Some of these residences are on the lakes and are recreational property; others are fixer-uppers that will be rented and leased out.

I see many parallels to the 1970’s in land and real estate. The 1970’s were a period of high inflation, higher interest rates and bear markets on Wall Street. There was much uncertainty in the economy caused by the Arab Oil Crisis and the end of the Vietnam War.

Today, the flight to real estate and farmland is the result of deflation in the stock market, low interest rates, and, again, an oil crisis, as well as terrorism and uncertainty in economic policy.

The big question is, "Will we observe a bust similar to the 1980s?" Only time will tell.

Interesting Perspective

If you and I overdraw our checking account by $15 we are penalized. However, a $4 billion mistake is just brushed aside.

Old Tractors

The joy of rural America is observing those old John Deere and International/ Farmall M and C tractors still being used or for sale. They got a lot of work done, but boy was it tough on the back!

High School Reunion

I attended my high school reunion last week. It was good to get back to New York and see how my high school has changed over the years. Boy, all my friends have aged. Ha Ha!

My e-mail address is:sullylab@vt.edu

Editors' note: Dave Kohl, Soybean Digest Trends Editor, is an ag economist at Virginia Tech. He recently completed a sabbatical working with the Royal Bank of Canada. He is now back at Virginia Tech with his academic appointment, which is teaching, extension, and applied research.

To see Dave Kohl's previous road warrior adventures type Dave Kohl in the Search blank at the top of the page.

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