Hum !!!!

[SDJIM]

Went to a land auction this morning---offered in 4 tracts

1. A rent auction where cash rent for 2 yrs with a option for a 3rd year and the winning bid was $220.00 per acre

2 same option as #1 winning bid $210.00 per acre

3 Land was for sale 89 acres winning bid $ 4050.00 per acre

4. Land for sale 65 acres all in current CRP contract winning bid $3500.00 per acre and the winning bid was from Ducks Unlimited :thumbsup:

Not what I expected as the cash rent to me was way high almost double what we get and the land for sale was a bit down from recent land sales in this area.

Don't know what to think--maybe things have started to level out some but then there is the really high bid on the cash rent--go figure

 

[UGUIDE]

Good info Jim. Good to see DU a winner on one.

Only thing I can think of that is keeping rent high is the yields on the new corn hybrids. Some farmers tell me they can net $800 and acre on corn.

 

[hunter94]

stay tuned and keep reading the national headlines...ethanol is coming under fire by a bunch of powerful groups in DC....someone figured out it is causing too much pollution!

 

[vizslaman]

Just catching up with you hunter94. I spend most of my time on the Nebraska and Kansas forums and missed your post. Sorry.

Anyway, from an economic forecasting perspective, I think the rents vs. the payments make sense. Put simply, if you're a farmer (big or small) and you see potential problems on the horizon, but still feel comfortable with the short-term outlook of your business, you don't commit to too much by renting vs. buying. Thus, the demand is still good for short-term capital expenditures, but nobody is excited to make long term commitment.

Speculation, but (maybe!) the market is saying that it has reasonable confidence in the short-term but very little confidence in the market forced over the long-term. Just a thought.

 

[moellermd]

Some farmers tell me they can net $800 and acre on corn.

Only if you can get 250 bu. and corn is 6.50.

 

[hunter94]

Just catching up with you hunter94. I spend most of my time on the Nebraska and Kansas forums and missed your post. Sorry.

Anyway, from an economic forecasting perspective, I think the rents vs. the payments make sense. Put simply, if you're a farmer (big or small) and you see potential problems on the horizon, but still feel comfortable with the short-term outlook of your business, you don't commit to too much by renting vs. buying. Thus, the demand is still good for short-term capital expenditures, but nobody is excited to make long term commitment.

Speculation, but (maybe!) the market is saying that it has reasonable confidence in the short-term but very little confidence in the market forced over the long-term. Just a thought.

i think you are spot on v man.