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| Good post Redoak! I agree that too many guys focus on the immediate profits vs. looking at the big picture. Over the long haul, rents go up and farm payments are fairly constant. On land I bought just 5 years ago, the payments are half of what I could rent it for today. At the time the payment seemed high enough but now it is keeping my costs down compared to the cash rent cowboys in the area. If I have a poor crop, I'll still break even. They could easily lose $100/acre.
All the advances in agriculture are being bid back into land rental rates. The landlord doesn't buy Bt corn or variable rate fertility equipment or gps row shut offs, etc. But in the end all the yield increases and improved efficiency is getting back to the landlord. Think what that means for the future when you think land prices are too high. | |
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breakeven in farming
