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Brazil farmland price volatility in distinct production regionsWohlenberg, Emerson January 1900 (has links)
Master of Agribusiness / Department of Agricultural Economics / Allen M. Featherstone / Land is a fundamental input in agricultural production and the factors affecting land
prices are an important topic in agricultural economics research. The farmland market has
several unique characteristics. Land price volatility can be a source of problems for farmers and investors, especially in periods of falling prices in locations far from markets where the impact of land price reductions is higher than in other locations.
This study analyzes land price volatility in different geographical regions of Brazil.
The hypothesis is that variation in land price increases with the distance to the market,
indicating that land price changes will be more pronounced in areas far from markets and
the effects of price cycles in land markets will increase as distance from the market
increases.
The results obtained in this research support the hypothesis that areas far from end
markets are exposed to greater changes in land prices and those same areas are more
susceptible to price cycles. The effect on price volatility was also stronger in periods of
land price declines. These regions have greater incentives for expansion and investment in periods of land price increase and greater risks of disinvestment and failure in periods of
land price contraction.
It is difficult to predict when a cycle of expansion or crisis will start or finish, but
the present study helps to understand the effects of increases or decreases in land prices
when such an event occurs.
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