| IN555 - 1/2/2025 02:52
A landowner has no risk? So if their ground is currently worth 15k/ac but corn trades $3.50 in the next year and land market softens like it did 10 years ago so now their ground is worth 10k/ac there was no risk? At $300/ac cash rent they just lost 17 years of rent meanwhile the tenant very well might have made a profit the entire time. With crop insurance taking away most of the risk how much risk is the producer really taking? Almost zero and that is why rents are so high.
You only lock in risk on a farm when you sell. Its a dividend investment that accumulates equity. Its like if a stock and a house had a baby. Its my choice of investment for retirement and why I've risked it all to buy land in my lifetime. I've never inherited an acre. As for crop insurance reducing risk? Your about to find out that its pretty worthless in this environment our government has created. Lots of land and equipment will be for sale this summer and its not retirement sales. Seeing it already this winter and late fall. Nothing has been more risky than farming the last 2 years in this economy. Yes your balance sheet still looks good, but your equity and cash reserves are declining at a rapid pace. Inherited farmland has zero risk. You will always find a peasent to farm it. Trying owning an apartment building or some houses and you will learn what true risk is. The farmer buying the land is taking true risk and he is usually renting land too and hoping he doesn't get buried by some bad government policy or inflation because he has very little control over the $ paid for his product
Edited by doathlon 1/2/2025 06:50
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The cash rent auction mcbees
