$520 an acre? I've got 160 tillable acres to rent at those prices.Put cash rent on the auction block and normal, rational farmers act like they're buying a Picasso, not the rights to farm a piece of flood-prone or sandy soil for only two years. That was DTN's Elizabeth Williams' impression after attending a weekend cash rent auction in Mason City, Iowa where many of the 300 people attending ignored blizzard warnings to observe a new phenomenon for Iowa: the public rental auction. (See her story today in Top News or on the Farm Business page).As Elizabeth reported, several parcels brought $520 per tillable acre, but most of the winning bids ranged from $425 to $490. Several farms came with warnings that they were rated a crop insurance risk and paid surcharges for coverage. So by all accounts, that denotes a huge premium given that USDA surveys show farmers in Iowa's most expensive cash rent county only paid an average of $235 an acre in 2011, according to USDA. (Keep in mind that "average" factors in below-market rates charged by elderly grandparents and other blood relatives.)A handful of landlords also solicited renters this winter by posting newspaper ads asking for bids on their Iowa farms. One of my Iowa friends--a loser at $465 an acre in the newspaper auction battle--thinks they can make high rents pay if they have long-term leases and reap the benefits of being able to spread hog manure (a potential $75 value versus the commercial stuff). Cash grain operators have trouble competing.
Thursday, March 29, 2012
Crazy Cash Rents
Progressive Farmer:
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment