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| Thanks for another good post. A lot to think about.
I prefer to use the 10 year treasury for land opportunity cost. 6% is not the risk free rate and better to compare long asset to long asset. I also prefer to use cash return to farming the land vs what landlord rental rate is. Over the long term there is greater profit in farming than renting it out.
Adjusting for those two things... land is still probably over valued. Put a 3 in front of corn and there would be no doubt. I'm seeing a lot of auction results coming down off last year's high though the bidding wars still grab the headlines. | |
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agriculture is an industry of dynamic change......
