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southern MN | In the 80s farmers owned (or owned with the banker) most of their land in the 70s things looked great and farmers expanded their land base and real estate loans dramatically. When the times got rough the land base was the big bargaining chip. It devalued a lot as there were more sellers than buyers.this put the bite on any farmer that went for the big expansion, as well as any lenders.
In today’s farming, it seems most farmers rent far more land than they own. Operating loans have replaced land loans to some extent?
It will be interesting to see how that makes things different, if we do go through the 80s again. Seems the crash would be in rental rates to land investors. I don’t know what their reaction and ability to weather such would be.
Paul | |
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State of Ag Banking
