by Lee Egerstrom | June 1, 2009 • Sales of farmland in Minnesota held steady during most of 2008, heading into the peak land market months of winter, reports University of Minnesota applied economist Steve Taff in his annual Minnesota Rural Real Estate report (PDF).
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“Neither boom nor bust,” was the way Taff puts his findings. There is always a lag time in the annual report, but through September last year there was no real evidence of continuing escalation or land prices or a fall in land values reflecting trends in residential and commercial property markets.
Land values are still high, reflecting runups in farm income from higher commodity prices in 2006 and 2007. Even though commodity prices have moderated from earlier peaks, corn prices above $4 a bushel and soybean prices near $12 a bushel are still giving strength to land prices.
Taff said about 1 to 2 percent of Minnesota farmland is sold each year. Sales data thus reflect what is “always a thin market,” Taff added.
There is justifiable concern that the nation’s recession will drag down Minnesota’s farm economy in time, causing a boom cycle to turn to bust. Those concerns are still valid, but it hasn’t happened yet.
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