For the last two decades the big winners in agriculture have included many geographically fortunate operators. Their family farm just happened to be close to the new Interstate exit and they were able to to exchange 200 acres for 2000.
Of course, those 2000 acres were acres that locals failed to step up and buy. Or could not begin to, because of the price. Regardless, 1031 exchanges have created the seeds of an "agristocracy" based not on merit but good fortune.
But in fairness, almost all successful farmers today can be labeled as lucky. The accident of birth or marriage can make an indifferent ag talent into a success. When you don't have to pay rent, you can have a poor marketing or production record and still survive.
The current perhaps brief window of enormous farmer margins and low interest rates offers an unparalleled opportunity for farmers to reclaim some lost ground (literally). Best of all, 1031 exchanges may be a long time returning in force, judging from the commercial real estate market. If they are closing big box stores, they don't need new locations.
Taken together, these closings amount to a tiny fraction of the nation's retail space. But they're indicative of a larger retrenchment under way, one that is likely to continue. America's largest chains—from Wal-Mart to Home Depot, from Starbucks to the Gap—are all in slow-growth mode in the oversaturated domestic markets. Circuit City and Sears are just two national retailers who may find it necessary to shrink their national footprints in 2008. And with consumer spending having slowed, it's much more difficult for landlords to fill newly vacated space. [More]This may be no more than a brief lull, but if farmers don't take advantage of it, we can assume they prefer to become a pure service industry to a "landed gentry".