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Everything is changing, But do we know it yet?

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Trapshooter1

Well-Known Member
A friend of mine is a salesman that works at a John Deere dealership. Was chatting with him and he said new equipment sales have come to a screeching halt, used machinery has slowed down a lot. Even parts have slowed down.
Commodity markets have been on the slide that is no secret, with interest rates at 7-8% yes 8% on farmland and cash
corn in the 3s. I think the correction is happening before our eyes we just don't know it, with the lack of land sales in the last 6 months it is hard to gauge the tillable market right now.

I believe we are headed into interesting times. Housing market here has come to a snails pace crawl. If the Fed has the gumption to not crumble under pressure I believe their will be deals coming in the land market when enough pain has been endured. But we are not there yet.

Just some thoughts on what I have been seeing. What's everyone else been seeing in their local area?
 
It’s SLOWING!!! No doubt about it!!!! Agree on equipment sales & that’s not my expertise.
Land sales…. Slowing. Not crashing. Not collapsing. Just slowing or softening. & I believe it will continue to slow & soften further yet. Especially “mediocre” stuff… low to medium quality, IMO & best guess ….. 10-20%. Top end stuff…. 2-8%. That’s my best GUESS. That’s with current course & situation.
Throw a recession into this?!!?!? Or corn going to $3.50 for a year or 2 … bigger reductions. Like it or not…. This election is gonna have big impacts on both rec & ag ground. Rec from an economy health + interest rate perspective. Ag from commodity prices + interest rates.
 
Trapshooter1 said:
A friend of mine is a salesman that works at a John Deere dealership. Was chatting with him and he said new equipment sales have come to a screeching halt, used machinery has slowed down a lot. Even parts have slowed down.
Commodity markets have been on the slide that is no secret, with interest rates at 7-8% yes 8% on farmland and cash
corn in the 3s. I think the correction is happening before our eyes we just don't know it, with the lack of land sales in the last 6 months it is hard to gauge the tillable market right now.

I believe we are headed into interesting times. Housing market here has come to a snails pace crawl. If the Fed has the gumption to not crumble under pressure I believe their will be deals coming in the land market when enough pain has been endured. But we are not there yet.

Just some thoughts on what I have been seeing. What's everyone else been seeing in their local area?
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There have actually been a lot of tillable land sales in Iowa in the last 6 months. As of right now, 2024 tillable land sales in Iowa are roughly on par with 2021 and 2023 and well above 18/19/20, though well below 2022. See link.

 
It's not all doom and gloom.

Stock market at record highs. Past month may have been my best month ever in market.

Interest rates highly likly to drop in September.

I wouldn't want to be a guy that paid record highs on tillable in last couple years.... ouch. Commodities little to no correlation to rec market imo. Different animals no doubt.
 
jflournoy said:
There have actually been a lot of tillable land sales in Iowa in the last 6 months. As of right now, 2024 tillable land sales in Iowa are roughly on par with 2021 and 2023 and well above 18/19/20, though well below 2022. See link.

Click to expand...
Maybe I should clarify that when I say "on par", I'm talking about the number of overall tillable acres sold, though honestly the prices haven't changed that much either. Maybe went down a little, but not that much. There are starting to be more "no sale" land auctions though. My take is that's mostly a result of unrealistic seller expectations driven by a combination of an overheated/overpriced land market the last 3 years + land agents saying "sure we can sell your land for that very inflated price!" all while very likely knowing that's not realistic. And yes, I am a realtor/land agent, and no, I do not list properties for sale way above attainable market values.
 
IowaBowHunter1983 said:
It's not all doom and gloom.

Stock market at record highs. Past month may have been my best month ever in market.

Interest rates highly likly to drop in September.

I wouldn't want to be a guy that paid record highs on tillable in last couple years.... ouch. Commodities little to no correlation to rec market imo. Different animals no doubt.
Click to expand...
Very much so. One is a business investment. The other can be seen as an investment, but when land is purchased primarily for recreational purposes, that is a discretionary purchase and those are the first things people usually tighten their belts on when things get a little tighter economically, or when, say, interest rates go way up. A lot easier to justify a high interest loan on a purely business investment than on a primarily recreational investment.
 
JBAGS said:
Can you elaborate? Could you post the article? Just curious
Click to expand...

The article from Daily Caller, referenced a build up of homes listed on the market . He compared it to 2008-09 in states such as Florida, Texas & Tennessee.

“Top Real Estate Consultant warns there’s a bubble about to pop on American Soil “
 
Hardwood11 said:
The article from Daily Caller, referenced a build up of homes listed on the market . He compared it to 2008-09 in states such as Florida, Texas & Tennessee.

“Top Real Estate Consultant warns there’s a bubble about to pop on American Soil “
Click to expand...
What are you seeing in your area - you're in the space - correct?
 
Trapshooter1 said:
A friend of mine is a salesman that works at a John Deere dealership. Was chatting with him and he said new equipment sales have come to a screeching halt, used machinery has slowed down a lot. Even parts have slowed down.
Commodity markets have been on the slide that is no secret, with interest rates at 7-8% yes 8% on farmland and cash
corn in the 3s. I think the correction is happening before our eyes we just don't know it, with the lack of land sales in the last 6 months it is hard to gauge the tillable market right now.

I believe we are headed into interesting times. Housing market here has come to a snails pace crawl. If the Fed has the gumption to not crumble under pressure I believe their will be deals coming in the land market when enough pain has been endured. But we are not there yet.

Just some thoughts on what I have been seeing. What's everyone else been seeing in their local area?
Click to expand...
Curious....What dealership does he work for??
 
I made a very similar statement to the OP on a different site yesterday and nearly EVERY person who responded said there is only growth and blue sky as far as they eye can see. Only increasing land prices for at least the next 5 years they said.............and that was the very moment I became very concerned that we were on shakier ground than anyone knows.

Irrational Exuberance!
 
Lucky 13 said:
I made a very similar statement to the OP on a different site yesterday and nearly EVERY person who responded said there is only growth and blue sky as far as they eye can see. Only increasing land prices for at least the next 5 years they said.............and that was the very moment I became very concerned that we were on shakier ground than anyone knows.

Irrational Exuberance!
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There will always be ups and downs but the odds ground is more 5 years from now is pretty high and a near certainty 10 years from now.
 
IowaBowHunter1983 said:
There will always be ups and downs but the odds ground is more 5 years from now is pretty high and a near certainty 10 years from now.
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oh I agree the long trend line will always be up, but to say there is NO CHANCE of any correction in the next 5 years is pretty bold talk from those guys.

reminds we of what they said in 2000 about the tech sector
or 2008 about housing

Many of these younger guys have no real recollection of 2008 let alone 2001. Only low interest and rising assets.

I am betting a 10% correction in next 5 years. Then it will trend back up. Some guys will take a significant hair cut
 
Lucky 13 said:
oh I agree the long trend line will always be up, but to say there is NO CHANCE of any correction in the next 5 years is pretty bold talk from those guys.

reminds we of what they said in 2000 about the tech sector
or 2008 about housing

Many of these younger guys have no real recollection of 2008 let alone 2001. Only low interest and rising assets.

I am betting a 10% correction in next 5 years. Then it will trend back up. Some guys will take a significant hair cut
Click to expand...
The correction will be sooner than five years. We are already in it, just keep an eye out for the next ISU ag survey report. It will show contraction. Then, add to it sub $4 corn and sub $10 beans which is going to send it land values into a nosedive and really screw up anyone overextended on land payments/rents.

I'm one of those "younger guys" but unlike most in my generation I was just entering the market in 2001 (before I could buy beer). I experienced the tech disaster and lost over 50% of my first two years of fully funded Roth IRA investments.

And, I had already bought and sold a home right before the housing bubble hit. Got lucky and unloaded it months before the crash, almost owned two homes at once. The second home we bought was off a young couple who bought it three years prior and they were still underwater.

Interest rate manipulation will help keep it from getting super ugly if Trump is in office
 
8bitnes said:
The correction will be sooner than five years. We are already in it, just keep an eye out for the next ISU ag survey report. It will show contraction. Then, add to it sub $4 corn and sub $10 beans which is going to send it land values into a nosedive and really screw up anyone overextended on land payments/rents.

I'm one of those "younger guys" but unlike most in my generation I was just entering the market in 2001 (before I could buy beer). I experienced the tech disaster and lost over 50% of my first two years of fully funded Roth IRA investments.

And, I had already bought and sold a home right before the housing bubble hit. Got lucky and unloaded it months before the crash, almost owned two homes at once. The second home we bought was off a young couple who bought it three years prior and they were still underwater.

Interest rate manipulation will help keep it from getting super ugly if Trump is in office
Click to expand...
I agree! I think the correction has already begun

In addition to $4 corn and $11 beans, add persistent inflation that could very soon meet and exceed land appreciation. Also add that net opperating expenses still increased 7% last year in spite of fuel and fert prices declining. Too many variables to list but there are warning signs everywhere. Smart guys will be able to cover their bets but others will not.
 
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