Posted 4/1/2010 10:04 (#1145959 - in reply to #1145878) Subject: Re: College economics and the grain markets.
Red River Valley
But you are not taking that 20% out of production you are growning something else on the ground and when everybody does that the "other thing " becomes unprofitable.
The problem is that any agland not used for some kind of Ag production is worthless unless you can get it into a goverment program and have them pay you for it. They that opens up a whole differant can of worms and hardly ever works in the longterm. Look what happened to the world land base with CRP it helped push or stabilize land prices here but as soon as the world got a little short on grains we lost production big time to the rest of the world.
Overproduction is a world wide event right now and it will be a race to see who is the cheapest producer which even though it does not make me very happy tells me that land prices need to reset lower.
My guess on how much lower ??? well with $2.00 worth of protien discounts per bushel in wheat I would guess that land cost at half of the current price wheat may be at break even. we used to raise some speciality crop here and make a pretty good return that went out the window this spring.
College economics and the grain markets.
