Download PDF 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. Key points
in this Outlook: - The current US farmland market is showing
patterns similar to the market bubble of the 1970s. - In the
1980s, prices fell 27 percent from peak to trough, causing
widespread bankruptcies and forec