What is in this article?:
- Agriculture's good times: Will they continue in 2014?
- Land price outlook hard to discern
- Farm bill implementation still murky
“It’s no secret farming expenses are going up, and if the USDA analysts are right, we could be facing a little squeeze," Mississippi Land Bank Chairman of the Board Abbott Myers said at the organization's annual meeting. "On the other hand, the USDA and prognosticators aren’t always right."
ABBOTT MYERS, from left, his wife, Sheryl, Dundee, Miss.; and Mikki and Jim Cassidy, Marks, Miss., were among those attending the annual meeting of the Mississippi Land Bank.
Land price outlook hard to discern
His most-asked question, Myers says, is “What are farm land prices going to do?
“I don’t think we’re going to see a farm land bubble, as some were predicting a year and a half ago. I do think we’re going to see some softening of land prices. However, sales in this region have been very few, and it’s hard to see a definite trend one way or another.
“Farm land prices have risen some since our meeting a year ago, but right now they seem stable, or maybe decreasing slightly. We hear of big sales to investment funds or other outside buyers, but it’s the average sale price that indicates what land prices are doing — and we just haven’t had enough sales to determine a trend.”
Production and commodity prices are going to be a major determinant in what land prices do, Myers says.
“The USDA says rice prices for 2013 will be down 12 percent, corn down 22 percent, beans down 14 percent, and cotton down 4 percent. Cattle prices are high now, and timber prices are still pretty much waiting on recovery in the economy and in housing.
“Returns for crops will determine how much land rent we pay, and return on crops and the rent we pay will be a factor in farm land prices.“
Factors that affect commodity prices will be an important influence on the farm economy and land prices, he says. “Demand is one of those influences. After the USDA said corn prices would go down, they did go down, but they’ve come back above $5 because of strong export demand. Soybean demand is also strong.”
Energy costs can also have a significant impact on the ag economy, Myers says.
“The U.S. has good supplies of oil and gas, but currently three refineries are shut down, which is affecting prices. There have been no new refineries built in this country in a long time, and the lack of refining capacity is really going to cause a crunch in fuel prices short-term.”
While the stock market has had a significant increase since last year’s meeting and unemployment figures are down, “the number of people not looking for work is increasing,” he says. “It doesn’t make a lot of sense when 50 percent of our nation isn’t working and the unemployment rate goes down. Whatever the numbers, unemployment is too high — and this needs to be corrected.”
The Environmental Protection Agency “has been very busy, pumping out new rules and regulations,” Myers says, “and we will need to continue to be vigilant to protect agriculture from burdensome regulations.”