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Land keeping farm economy afloat

An ag economist says one of the main reasons the current down cycle is not the same as the 1980’s farm crisis is land.

“Land has held it’s resiliency.”

Professor emeritus Dr. David Kohl from Virginia Tech says farmers have been able to take their operating losses and stretch them 10 to 20 years by refinancing farmland.  He questions how sustainable that option will be in the years ahead.  “We are now six years in this downturn and it’s going to be real interesting to see how much longer this refinance cycle continues.”

He says in some cases, lenders could tell farmers they can’t refinance which would ultimately cause land values to decline if enough of it goes for sale.

Kohl told ag bankers at their annual conference this week to keep an eye on growing trends including changing diets, millennial influences, farm robotics, and shifting management to larger family partnerships and women.