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Last month, we discussed the farmland bubble argument, weighing ag industry consolidation and food price volatility against well-performing loans.Today, in her inaugural speech as head of the Kansas City Fed, Esther George sided with the bears (cows?), warning that the current spike in farmland values could prove short-lived if the housing bubble was any indication.
In our own Midwestern backyard, farmland values are soaring to unprecedented
levels. Each week brings a new tale of dizzying prices at the most recent farmland auction. I
hear from many well-informed, concerned voices across our region wondering whether this
could be a bubble. Only time will tell; however, these types of events have played out in the past,
and the results were not kind to the industry involved or its banks.