By Blake Hurst Friday, March 29, 2013

Farmers have been taking on mounting debt, creating an unsustainable increase in land prices and risking a crash that would ripple through our economy.
Eeyore should have been a farmer. Itís almost impossible to find a farmer happy about his situation. The weatherís too hot, cold, wet, or dry, and prices are too low or too high, depending on whether weíre buying or selling. We canít, at least in front of our peers, admit to prosperity or even the chance of prosperity. Although weíd never admit it at the local coffee shop, the last few years have been good, at least for Midwestern grain farmers. Prices have been strong ó strong enough to make up for much of the production lost to last yearís drought. Thatís terrible news for livestock producers, whoíve been faced with drought-damaged pastures and high feed costs, but for farmers producing corn and soybeans, it has been a profitable few years.

Farmers have cash, and nowhere to invest it but farmland. Farmers largely ignore equities, as they tend to balance the inherent risk in farming by investing in what they perceive as less risky places. We arenít dumb, however, and have figured out that it's a losing game to invest in bonds or CDs at rates less than inflation while weíre in tax brackets we never even knew existed.

When a farm in Iowa sells for $21,900 per acre either the dollar is terribly inflated or land prices are, I guess both.