Thursday, July 21, 2011

The June Rural Mainstreet Goss Report

"We are beginning to see some of the air exiting the farmland price bubble." ---Ernie Goss

The Goss Reporting on June rural mainstreet surveys is showing:
  • Farmland price index drops to lowest level since October of last year.
  • Almost one-third of bankers report that out-of-area buyers have been the primary purchasers of farm land over the past 4 years.
  • More than two-thirds, or 68 percent, indicated that most buyers were local.
  • Kory Schow, CEO of the Bank of Keystone in Keystone, Nebraska said, “It is largely well-established operators who are leveraging strong balance sheets to obtain ag (agricultural) land. At one time it seemed most buyers were out-of-town using 1031 (Real Estate) exchange money to make ag land purchases.”
  • Almost six of 10 bankers indicated that a farmland price drop of 20 percent or more would mean negative returns for the farm sector.
  • The economic confidence index, which reflects expectations for the economy six months out, slumped to 55.3 from May’s strong 63.7 partly due to flooding and other weather issues.

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