Reality speaks - 2/17/2024 19:54

a dose of reality. I can tell you that I have seen the results (accrual adjusted earnings after living and Taxes paid) 19 operations to date. 5 have made money 14 have lost. The average loss is 7% of the gross income and is running at about $77/ac . All 19 operations were profitable in 2022 with an average profit of 20% of the gross or a little over $200/ac Tons of working capital destroyed. Lots of new debt incurred with larger debt payments going into 2024 vs 2022 and much lower earnings potential. Land values still hanging in there but land values are a lagging indicator so that does really mean too much. coming back to reality is going to be tough for some operators in the next couple years. Seeing some operations trying to figure out how they are going to 6-7% interest rate works as their 3% interest rate is coming to an end this year or next. (a doubling of interest costs on the largest debt (farm land)) is going to hurt.