After more than doubling in some Midwest states in the past few years, farmland values have begun to bear the brunt of tumbling corn prices. Wheat and beans are well off historic highs as well.
Analysts assure a repeat of past collapses is unlikely as farm income remains strong and debt levels low, but a "recalculation" is at hand. "Profits will be tighter," says a 3rd-generation Illinois farmer. "There's not going to be near the returns, and guys will have to be careful how much expenses they've got into an acre." It's not exactly the kind of thing Deere (DE -1.6%) or AGCO (AGCO -0.9%) investors like to hear
Winter is typically the busy season for auctions, but this year has seen a number of "no sale" results. In Iowa, 6.7% of auctions failed in 2013, double the amount in 2012. The USDA forecasts farm incomes will dive 27% this year from 2013 to the lowest level since 2010.