Farmland Prices Fall in Central U.S.
by: Jesse Newman
Aug 12, 2016
Click here to view the full article on WSJ.com
by: Jesse Newman
Aug 12, 2016
Click here to view the full article on WSJ.com
TOPICS: Supply and Demand
SUMMARY: The price of farmland dropped across much of the Farm Belt in the second quarter, Federal Reserve reports showed on Thursday, as the global commodity rout weighs on crop prices and farmers' incomes.
CLASSROOM APPLICATION: Students can use supply and demand for farmland to analyze the effect of decreases in crop prices on the demand for, and ultimately the price of, farmland. They can also examine the effect of decreased crop prices on the demand by farmers for loans.
QUESTIONS:
1. (Introductory) Is the demand for U.S. farmland derived from the demand for U.S. crops?
2. (Advanced) "While the June bumps in corn and soybean prices provided an opportunity for some farmers to boost their revenues, they did not seem to alter the overall trend in farmland values," said David Oppedahl, senior business economist at the Chicago Fed. Why did short-term increases in crop prices not affect the farmland prices?
3. (Advanced) What is the effect of decreased crop prices on the loan default rates and the demand for loans by farmers?
1. (Introductory) Is the demand for U.S. farmland derived from the demand for U.S. crops?
2. (Advanced) "While the June bumps in corn and soybean prices provided an opportunity for some farmers to boost their revenues, they did not seem to alter the overall trend in farmland values," said David Oppedahl, senior business economist at the Chicago Fed. Why did short-term increases in crop prices not affect the farmland prices?
3. (Advanced) What is the effect of decreased crop prices on the loan default rates and the demand for loans by farmers?
Reviewed By: James Dearden, Lehigh University
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