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North Central Indiana | Best as I can pencil, a true fire sale in ag land would work out fine if you had the gonads and pockets to ride it out. It would lead to massive consolidation, probably not with the large farms of today either. But a few things hold a fire sale back from happening. 40% of ag land is cash rented, meaning the owner doesn’t farm it. Most of those owners are heirs that didn’t have to buy the land. So no incentive to sell off in a fire sale if they didn’t sell at record price. Almost 30% of “farms” operate on only rented ground. Now let’s take those percentages out farther into land use. More than 50% of crop land is rented, or owned by a “non operator” with someone else doing the farming. Only about a quarter of pastureland is rented. Which makes sense and is what I would’ve expected. But that means to truly flood the market, either farmers would have to start dumping their land or the rest of the owners would have to decide they want to jump out and accept less than top dollar. I just don’t see what would put that much pressure on non farming landowners to jump out of their investment at a huge loss or their inheritance at a lower value. And while sometimes a farmer sells a piece of land to finance some other venture, it’s not super common. You can’t farm what you don’t control through ownership or lease and very few willingly give up that control. So maybe it happens, but I just really struggle to see it | |
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All bulled up
