Us farmland demand slows down

Demand for farmland in the US is slowing down, according to new reports.

Farmland values have been rocketing around the world, repeatedly breaking records. Now, though, as the market prepares for its peak season between October and December, demand has cooled slightly.

“We've peaked for right now unless the grain markets rebound sharply, when it might Change things and go the other direction. But right now I think is probably a leveling off period,” a broker from Farmers National told The Jamestown Sun.

Grain prices have particularly suffered a dip from 2012, when prices jumped 20 per cent to 30 per cent. Corn prices have fallen 30 per cent year-on-year, but last year’s drought puts this year’s harvest in a strong position, with yields predicted to remain high.

Banks have recently warned speculative farmers and investors not to chase low prices to try and avoid a farm debt crash, which last occurred in 1980s.

“The difference with the 1980s is that 75 percent of land then had mortgages. Today, 25 percent does,” Jeff Obrecht, an Iowa-based broker told the paper. “That makes a big difference.”