Is There a Farmland Bubble?

This is a very interesting story on how farmland might be forming a bubble in certain states.

This time around, Leuthold sees a more moderate pullback -- 15% to 20% in
three to five years -- because buyers are employing less leverage and interest
rates are lower. His main concern is that the ethanol boom rests on shaky
economic underpinnings. Without government subsidies, ethanol makes no sense, he maintains. And the subsidies could disappear because of a backlash against costs of producing the fuel -- higher supermarket prices and huge demand on water supplies. The measure was opposed by groups representing the world's
undernourished and by competing agricultural interests like the National
Cattlemen's Beef Association. Big Oil dislikes the program, too, and Big Oil has
deep pockets to lobby Congress.

I agree with him up to a point but it is pretty much based on who controls Congress and the White House for the next 4 years. If the Dems control it all I would be willing to bet that they will keep the ethanol subsidies going in the name of a greener economy. I think Big Oil may be persona non grata if the Dems getting into power. I think that undernourished group may put some pressure on the Dems but not more then the Farmers Lobby would.

If the Republicans control it you may still get extreme pressure from those big red state Farmers but Big Oil might win out in the end depending on who wins the nod. In any case renewable energy is here to stay but how much the government will pay to subsidize it is the question.