Are We in a Farmland Bubble?

The last decade’s bubble in the US housing market has been the subject of great attention, but few outside the farming sector have examined a similar bubble in the US farmland market in the 1970s and early 1980s. During this time, average US farmland prices first boomed and then fell 27 percent from peak to trough, with disastrous effects for farmers, lenders, and the Farm Credit System. Trends from the past two decades suggest we may have entered another such bubble. Real farmland prices have been climbing over the last 17 years and are now higher than at the peak of the previous bubble. Analysts and experts are reluctant to declare this a bubble, and plausible economic reasons for current prices have been proposed. But it is also plausible to imagine prices dropping again.