Will Farmland Prices Fall Due to COVID-19
Will Farmland Prices Fall Due to COVID 19?
Just like all of you reading this, I too have been thinking a lot about COVID 19 and what the effect on our market will be. I reached out to a couple of my friends in the land market as well as some farmers to try to judge the tenor of where we feel the market is heading and what to tell my clients.
Fear is a funny thing. I have thought to myself if the Stock Market crashes will people feel that we are heading into a recession? Will Investors pull their money from their stocks and start buying farmland? If the quarantine continues will we be able to farm, plant crops, sell crops, and will there be anybody to buy our crops? Talking with my livestock market friends, I wondered what if the workers at the packing plants got sick, would we be able to sell our livestock if there was no one to process it? Will farmers be a necessary component to the people of our country? Will we be able to produce enough food to feed the world? Right now, we don’t have these answers, but judging by the attitudes in the industry and our nation’s history we are likely to prevail.
Fear can be a funny thing. As I look at my social media feeds today, I find one side thinks this is all made up and a hoax. The other side thinks the world is coming to an end.
We are faced with the very gravest of challenges. For one of the first time in our history our species has the technology to prevent its own extinction. I believe that all that can be done to prevent this disaster is being called into service. The human thirst for excellence, knowledge, every step of the ladder of science, every adventurous reach into space, all of our combined technology and imaginations, even the wars we have fought, have provided us the tools to wage this terrible battle. Through all the chaos, and discourse, through all of the wrongs and the pain and suffering, there is one thing that has nourished our souls and elevated our species above its origins … and that is our courage and resilience.
May we, all farmers of the world, overlook these events and perceiver.
Here is what I know is going to happen.
I feel that COVID 19 will be a small shadow as compared to the economic downturn that is to come. I do feel that money will be on the minds of all people including farmers.
Here’s the thing, this is nothing new for farmers! Garth Brooks said “If your paycheck depends on the weather and the clock, if your conversation calls for a little more than a coffee pot.”
The uncertainty that is to come has always been in the back of the mind for farmers. Thoughts about the weather, board of trade, foreign markets, timing, new treatments to our crops, new technology that threatens the way we currently operate and how to provide for their families.
My mind always comes back to the same thoughts. Farmers are the kind of people that laugh at challenges and overcome. They are the kind of people that see opportunity when no one else does. They are the kind of people that throw up their middle finger when they see or hear something they don’t like. They are some of the smartest people on the planet because they are data driven and strive to continually improve.
No matter what economist you ask they will all tell you that the world operates on supply and demand. When there is a short supply it takes a lot less to build the demand. Even a small demand will seem plentiful. All the farmers I know, look for the opportunity when no one else is doing something and they want in. They are hard-headed and have the courage to persevere.
There is no more farmland being produced and that keeps our market supply low and the demand (even in tough times) high. Farmers are smart and will buy if they think the market is low. The good thing is, that they all will do this and keep the competitiveness of the farmland market strong. For the same reasons the farmland market has stayed steady and it will continue to stay strong with low interest rates, low supply, neighboring land, old money, tax exchanges, and the security of being one of the safest investments on the planet. How many times do you ever see a farm field without crops planted? Therefore our farmland markets will not crash even looking down the barrel of COVID 19.
The human race still needs food. Farmers still need a job to make a living. Farmers still need to produce crops to make that living. They still need land to produce crops. For all of time, farmers have continuously improved, grown and they will continue to do so in the future. Farmers are the backbone of America!
David Whitaker | Iowa Land Guy
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