Don't be "blinded" by the many positive factors supporting land prices and rents and ignore the risks, warns Andrew Swenson, North Dakota State University Extension farm management specialist.
The main factors that have increased the demand for land in recent years has been the:
- financial capacity of potential buyers
- projected farm profitability
- interest rates
Any of them – especially farm profitability — can change quickly, he says.
"In these heady times, buyers and renters should not be blinded by the many positives and ignore potential negative outcomes that could occur from a bumper world crop and/or a downturn in the world economy, a poor production year in North Dakota or rising interest rates," he says.
Source: NDSU Extension Communications