The end of the year gives us a whole lot of retrospective pieces on what happened during the year, and, rest assured, when it comes to market prognosticators there will be plenty of “I told you so” statements. While plenty of that occurs in the agricultural markets, the general stock and commodity markets scream so loud that it’s almost impossible to get through a business market show without the mute button handy.
We’ve all heard the saying: “Hindsight is always 20/20.” And of course the person who made the right prediction will be crowing the loudest. That’s why I bristle at these end-of-the-year retrospectives because I often wonder how many times the same person has been wrong.
What I find even more interesting to follow and study are the predictions for the future. I’ve long hung up my own crystal ball, preferring to look to the experts to gain insight.
One area that’s been a hot button in agriculture is the explosion in land values. Now of course, not every piece of land or auction brings the same price, but over the past several years the numbers generated from land sales have been eye-popping.
But with the recent reversal of commodity prices (at least in the short term) what will 2015 hold?
I found this release from Murray Wise, a leading authority on farmland, and it provides some very interesting perspective.
“This year has been one of transition, with prices varying widely depending on land quality and location. The market has been rewarding the more productive land, but buyers have been less enthusiastic about lower quality land in poorer areas. As to the overall direction, I think we’ll start to get more clarity in the coming months, especially in the Corn Belt,” Wise says in the release.
But he also offers this comment: “Commodity prices vary a lot year to year, and farmland buyers generally are thinking in terms of a time frame that’s 10 years or longer. So today’s low corn prices are just one of many factors — and a short term one at that.”
I think that is a great perspective to have as we look forward to the New Year. Sure, commodity prices may be depressed now, and we may be in for some rough waters, but we’ve come off of some very high prices, and it’s not like people are going to stop eating anytime soon.