Can a president’s visit to rural Minnesota help farmland values rise in communities across the country? The visit itself? Perhaps not. But President Joe Biden’s $5 billion series of proposals could fortify potential in smaller communities, although there are far too many uncertainties to know yet whether the concepts will directly lead to higher land prices in a meaningful way.
RELATED: Here is a detailed account of the November 1st event in Northfield, Minnesota.
Even before we get into the specifics about what the president wants to do, we must recognize the headwinds working against landowners right now: interest rates and congressional chaos.
Interest rates: On Wednesday, the Federal Reserve decided not to raise the federal funds rate again, which would have further increased borrowing rates. That said, the move doesn’t lessen future costs for landowners who don’t have the means to buy without taking on debt. So, borrowing costs remain an impediment for some.
Congress: Republicans last month dumped their speaker of the house, Kevin McCarthy, and then bickered for three weeks before finally choosing his successor, Louisiana’s Mike Johnson.
FLASHBACK: "I do not regret negotiating. Our government is designed to find compromise." – Watch Kevin McCarthy’s comments after he lost his position as the leader of the U.S. House of Representatives on October 3rd.
Here are some highlights that could impact landowners from President Biden’s rural America tour that he and top administration leaders will take over two weeks:
$1.7 billion in “climate-smart agriculture” (improving soil quality, natural carbon sequestration, buffers for waterways)
$1.1 billion in rural infrastructure (water and electricity systems, biofuels)
$2 billion in rural economic development (increase access to health care, affordable housing, access to clean water and energy)
$274 million for rural high-speed internet
$145 million (energy efficiency improvements)
POLITICAL REALITY: Biden faces re-election in a year. His support in rural areas could use help as lesser-populated communities (where older, more conservative voters remain) have been more likely to vote Republican. And his rural American tour began in Minnesota, the home of U.S. Representative Dean Phillips – a Democrat – who announced that he is running against Biden for the party’s presidential nomination.