Despite experiencing the worst drought in recent history, farmers across the country are likely feeling a bit more secure at news from major American banks that farmland values are holding steady.
For most of the summer, farmers across the country have struggled with extreme drought conditions. With temperatures reaching record highs and precipitation dropping to all-time lows, severe drought conditions rapidly spread, affecting roughly 65 percent of the nation and turning more than 1,000 counties into disaster areas.
Despite the serious consequences of the drought (which have crippled corn production, devastated livestock farmers, and hurt river-based agricultural shipping), farm values remain strong. “We’re watching it pretty closely … but we’re certainly bullish on the industry,” said the vice president of Bank of the West, the nation’s second largest agricultural lender.
The news will likely quell fears of an impending land price bubble. In the 1980s, a damaging drought helped pop the farmland price bubble, leading to a devastating agricultural recession. Financial officials, however, argue that farmers have significantly less debt now than they did in the 80s and that the high prices commanded by many crops (thanks to lowered supply and continued ethanol mandates) will prevent a serious financial catastrophe.
To learn more about agricultural financing opportunities contact a Farm Plus Financial representative by calling 866-929-5585 or by visiting www.farmloans.com.
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Written by: Justin Ellison / Farm Plus Staff Writer