Dennis Gartman

Dennis Gartman, one of the speakers at the Jan. 25 Land Investment Expo in Des Moines, said there are a number of issues facing farmers this year. The list includes a trade war, low commodity prices, a growing federal budget deficit and a divided government.

DES MOINES — There is plenty of uncertainty in the agricultural outlook, but farmland continues to sell and farmers continue to be buyers.

“It’s hard to say why, but farmers continue to buy land,” said Steve Bruere, president of People’s Company, a Des Moines-based company that sponsors an annual land investment expo.

This year’s expo Jan. 25 featured a number of speakers, several of whom talked about the agricultural economy and its future.

Dennis Gartman, an economist who publishes the Gartman Letter, said there are a number of issues facing farmers this year. The list includes a trade war, low commodity prices, a growing federal budget deficit and a divided government.

“I fear the increased tariffication of the U.S. economy,” Gartman told the audience at the expo.

But he said that he isn’t concerned about a federal budget deficit or a strong dollar. The U.S. economy is likely to remain strong in 2019, he adds. Commodity prices are another matter.

“Commodity prices are bloody cheap (historically),” he said.

Meanwhile, Peter Zeihan, who describes himself as a strategist on geopolitics, said the next 10 years look OK for the United States but not good at all for the world as a whole.

“It’s nothing less than the end of the world as we know it,” Zeihan said.

Not literally, he stressed, but the existing world order appears to be ending, and the world is entering an age of disorder and confusion where every country is on its own.

For a couple centuries, the world powers followed a colonial model, he explained. When that fell apart after World War II, it entered a cold war where countries divided between supporting the Soviet Union or the West, led by the United States. When the Soviet Union fell about 30 years ago, the United States took the lead as the primary world power and provided a stable environment.

But now, he said, populist nationalism is leading the world in a different direction, and the United States is leading the way, in part by not providing any leadership that would provide stability.

“The Americans really don’t care,” he said.

The only good news from this scenario, he added, is that the United States, as the predominant military and economic power, is also the one most likely to do well under this new world order. And while he isn’t upbeat about President Donald Trump’s leadership, he said that Trump’s hardball trade tactics may end up benefiting the United States in the short run.

“At its core, he’s got a really good point (about trade and world trends on trade),” Zeihan said.

He said Trump has been more lucky than smart regarding American power. But he said the United States is well-positioned with large stocks of oil and natural gas and with demographic growth that should benefit it on the world stage.

Other countries face big challenges. Brazil, he suggested, is facing severe social and political problems that could disrupt its export-driven agricultural economy. China will see its rate of growth slow. Unless Brexit is reversed, Britain will need U.S. trade. Canada has little leverage with the United States. And he said Russia has a weak economy and a military that is much weaker than the U.S. military.

Still, both Zeihan and Gartman said the United States is in better economic shape than most of the rest of the world. And Bruere said that while there are clear economic concerns facing farmers, there is nothing to indicate that farmland prices will drop dramatically in the near future.

Instead, Bruere said, it appears likely that prices will stay steady or continue to gradually slip a bit over the next year or two.

Gene Lucht is public affairs editor for Iowa Farmer Today, Missouri Farmer Today and Illinois Farmer Today.