Are Farmland Prices Entering Another Bubble Similar to 40 Years Ago

The American Enterprise Institute for Public Policy Research released a new report that shows the current U.S. farmland market is showing patterns similar to the market bubble of the 1970s. Resident Fellow at the Institute Alex Pollock says prices peaked in 1982 before real prices fell back to their level of 15 years earlier while defaults and insolvencies escalated. Pollock says trends from the past 20 years suggests another such bubble may be where prices are now. He says 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 - but it's also plausible to imagine prices dropping again. The Federal Reserve's record low interest rates specifically have contributed to inflation in farmland market prices - according to Pollock - who believes when interest rates begin to rise - farmland prices may drop.

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