Is the bloom off agriculture!

[highwayman]

Have heard reports of 1 parcel of land in Drinkwater area traded for $2000/acre. Good time to sit on the fence and watch the hogs get slaughtered. For those of us who lived through the late seventies/early eighties its De-Ja-Vu, and we should all remember what happened after that.

[hobbyfrmr]

wd9, I think I know what you are getting at. These are pretty loose details so dont quote me on this. I worked for a farmer who, in the mid '80s (I was 12 years old)paid high for land, bought some modern farming equipment and built a new house on the farm. Then interest went up, grain prices dropped. They called in his loan. He rented it back for 6 years, got 6 crops, never paid full value of rent for the same reasons above, then he bought it back for much lower purchase price and lower interest rates. Can a person still pull this off? Or...now, are there other competitive farmers (with better balance sheet) that will write a cheque and buy this land. I know there was a handfull of guys in the area who did this and it created a lot of resentment by the older, more conservative farmers in the area. This guy is happy and still farming with newer, big equipment, new diesel trucks etc. Alpha Male type stuff!!

[hobbyfrmr]

holy cow I am slow, there was 3 replies by the time I got my question out!!

[wd9]

Yes you are hobby. We see a lot of industries built for full value, they go broke, someone takes the hit, new buyer comes in on cents on the dollar and voila, its profitable. Be the guy that's buying the cents on the dollar.

[grrrr]

Why are people capitalists when they are greedy and grabbing everything in sight and suddenly become socialists when they realize they can't make the payments?

[farmaholic]

HAHAHAHAHAHAHAHAHA!!!!!!!!!!!

[Hopperbin]

Ok at one time banks were lending out money full amount of purchase price as even the banks thought the price was always to increase, so there was write downs and origional owners kept the land as they were always still the highest bidder. They kept their land cause they made the most money off of it. That does not happen today. No one buys land without some collateral. Land goes back to the bank and sold off. As a member of a credit union there have been much more gains than losses from land going back to the financial institutions.

[ajl]

There was quite a number of people with
debt write downs in the mid 1980's around
here. Just don't be the first to go
broke. Same pattern will repeat so if you
need land you just have to pay what it
takes to get it.

[sumdumguy]

FCC - lending at these prices? Nuts. The system
will wipe out the middle class no matter what, I
think this is the plan. Wipe out interest rates.
Herd them into equities, there goes half, then into
gold, the other half. Voila! Cash will be king when
the shise hits the fan. just like the dirty thirties.
The guys who had an old man who never parted
with a penny snapped up all the land. The big
shots with a big new Merc hid in the attic. The
tightwads cleaned house.

[Hopperbin]

ajl if I got the name correct. What happened in the early 80s will not repeat because it has not even started.