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Originally Posted by Nirvana
Farm land its better than owning others companies ..if there are live people they will always need to eat...
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From The Economist of 25 Aug 2012:
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Farmland Prices
This year's drought in America will reduce farm incomes, but the price of farmland in the Midwest has risen by almost 20% since the end of last year. Strong farm incomes in recent years (and low interest rates) have enabled farmers to pay up for land; high commodity prices have also attracted investors. The price of land in America's corn belt is ten times greater than in Canada's main farming provinces, now among the cheapest places in the world to grow grain.
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Earlier on 20 Apr 2011:
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Though down a bit from the highs of 2008, inflation-adjusted farmland values remain well above the last great peak of three decades ago (see chart), buoyed by strong commodity prices, low interest rates and a weak dollar. In parts of the Midwest they rose by more than 20% last year. Feeling flush, farmers have rushed to buy and cultivate more land. Inventories look likely to remain depleted, putting upward pressure on crop and land prices. Investors now account for a quarter of all land purchases in some states. ...
A rise in capitalisation rates back to their historic average would imply farmland-price falls of up to a third, estimate officials at the Federal Reserve Bank of Kansas City. ...
[FDIC] examiners are no longer relying so much on aggregate industry data, says one, but are "asking more questions of individual high-flying lenders about how they plan to mitigate the risks of a bubble bursting." They are urging banks to lend based on cashflow projections, not collateral values.
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A reason for the massive recession: banks and other financial institutions failed to do their jobs; to verify an applicant could afford the loan. This 'deregulation' (approved by 'political propaganda') created one massive recession. We don't need another created by irresponsible finance people.
Review what happened in 1929 to understand why farmland prices, like house prices, do not necessarily mean a good investment.
Despite what bean counter types say, a good investment must be based in the product. Not myths so often promoted on spread sheets created by finance people. Due to finance spin, land prices may be 30% too high; a crash can be expected.