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Southern Illinois | This sale was a little further out and I know for a fact the only outside income source was cattle. This was in central Marion county which has seen an influx of farmers from further west buying up land lower than what they previously could. However, the prices have now equalized and they are now just buying less productive soils for the same money.
Runnin, you basically describes me in your evaluation of the area. I am 32, full time engineer at an auto parts supplier, trying to grow the farm enough so I can do it full time in 10 years. However, at least in my area, most of the supplemental income is either cattle, dairy or hogs (none of which are great options now) or spouse that house a job in town mainly for insurance and some cash flow.
With all that being said, I still feel sooner rather than later the law of economics will prevails and there will be a correction, and for some a painful one. I ran the numbers, and if you assume they put down 20%, (say $570,000 which is an enormous amount of cash for a farmer to have on hand), they will still have about $175,000 a year in principle and interest payments on a 20 year note at $4.25%. If you also assume a $200 an acre profit per year (very optimistic and only possible on all paid for ground) it will take 875 acres total to service the debt. There were 280 tillable on that farm, that means you are effectively taking income off 600 acres of free and clear ground and eliminating that profit from your bottom line.
Oh, last but not least, the money for the principle payment is POST taxes, the calculations assume a generous income on paid for ground ( more than my operation is planning at today's prices) and that interest rates don't go up.
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Southern Illinois Land Sale
