Yes. Good post. The difference in mnay situations however, is the equity that stored up in other land. Inheritance... purchased 5... 10... 20 yrs ago... its easy to borrow against that land and have alot of room to handle the price swings. Thats why a market correction will come for equipment ( to a degree) and land rents...but land values??? I doubt it. Bare in mind im not that old and havent been thru any real downward cycle.... but the amount of investor money, whether it be foreign or local... and old school money ... will be there ( i believe) to support land prices. Sales may slow but there willl always be someone who can afford land.
The big change in ag over the last 5-10 yrs that will pummel guys is the self imposed stupidity that is jacked up rent and equipment purchases.
Personally.. i can Make money on 40 bushel canola selling at 14. Breakeven would be way down around 10 $/ bushel.
But.. the newest thing on our farm is a 2014 s680 bought for 80 k and we have very little equipment debt. If crap hits the fan i sell a tractor and no worries... tough to sell something you are leasing and the depreciation clock is running on it.
Alot of the big dogs who got bigger by poaching land and leasing equipment will be farming many.. many acres just to breakeven this yr. Thats a recipe to work. Not to get ahead.
Now is the time that the weeds will get separated from the chaff.
We will definitely see some farms shutting down over the next yr if these values hold down where they are... which, is a beautiful thing. Capitalism at its finest.
The big change in ag over the last 5-10 yrs that will pummel guys is the self imposed stupidity that is jacked up rent and equipment purchases.
Personally.. i can Make money on 40 bushel canola selling at 14. Breakeven would be way down around 10 $/ bushel.
But.. the newest thing on our farm is a 2014 s680 bought for 80 k and we have very little equipment debt. If crap hits the fan i sell a tractor and no worries... tough to sell something you are leasing and the depreciation clock is running on it.
Alot of the big dogs who got bigger by poaching land and leasing equipment will be farming many.. many acres just to breakeven this yr. Thats a recipe to work. Not to get ahead.
Now is the time that the weeds will get separated from the chaff.
We will definitely see some farms shutting down over the next yr if these values hold down where they are... which, is a beautiful thing. Capitalism at its finest.
Comment