I was at local business today when a guy asked me how much new iron I traded for this winter. I had to laugh and say “none, I am not into that game”.
He laughed and said that “I must not be that good a farmer if I wasn’t spending all my profits on trading equipment to avoid paying taxes”.
I laughed back and said that an “old tractor worked just as good as a new one for the same job as last year”.
He shook his head in agreement and we talked about all the new iron that is showing up in driveways the last few weeks. I have noticed several million dollars of combines and tractors moving up and down the roads around here as of late. Guys have had a couple of good years and with the government and their squirrelly tax laws, especially the lack of a continuation in the large deprecation write off, they are spending the money to avoid the tax and also to insure they have some depreciation to write off in the future.
He then commented that he would like to invest some money into farm land and asked what it was going for right now. After talking about some land sales around here where ground went for anywhere from four thousand to ten thousand he then laughed and said that he would leave his money in the bank. He thought that the land market was over valued and headed for a bust.
I don’t know about the land market, it could bust or plateau. I just don’t know. I don’t seem to know much anymore when it comes to the farm economy.
The one thing I do know is that new iron will eventually rust. And if there is a land bust, then that new iron will be hard to pay for in the future, rust or not.