Friday, December 9, 2011

WSJ: "Macquarie Executive Warns of U.S. Farmland Price Bubble"

There is no justification for U.S. farmland prices to be three to four times higher than land where the same crop is planted in Brazil, or 30 times the corresponding prices in Russia, he said.


WSM said...

Do you agree w/ that statement?

Without having looked into it much, I could see a substantial premium being justified on the basis of differences in factors like rule-of-law, regulatory environment, tax considerations, and market frictions/liquidity between various countries.

CP said...

Sort of. You are right that U.S. real estate should trade at a premium on a rule-of-law basis.

I do think that U.S. farmland is unbelievably overpriced though.