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| From my accounting/banking sources the issue is family living and whether or not there will be adjustments. I consider over investment in equipment another component of family living at times (need vs want).
There is no doubt folks made big money in the run up, but talking about paying down debt and positioning for the future wasn't popular. I'm sure some did hold back, but it wasn't the popular position. The norm was to spend the increase on high price land, high price equipment and an "in town" lifestyle.
Here are some things to consider:
1. Very high land prices got rid of a lot of cash in a hurry for not much land - $1M/80 acres
2. Machinery sales were over the top with no end in sight - not many were trying to save anything
3. Guys are still willing to pay too much for auction machinery (I have some stuff to sell so I hope this trend hangs on a while)
4. Marketing went to Grow it, Bin it, Sell it with all other methods being foolish and stupid - lots of unsold grain that isn't likely to capture an attractive price (I could be spectacularly wrong, but it's not the trend)
5. Keeping input costs in check went out the window even as input prices became confiscatory.
I think a lot of this has to do with when you started farming (what were the economics) and/or what is the vision for the farm. Lots of folks got sold on go big or go home and even after lots of examples of using only gbgh resulted in failure, it's still the popular option. Nothing wrong with size, but it does have to pay most years otherwise you don't get to farm.
OSUBuck is fundamentally right - the market will grind lower to slow supply. We have an oversupply even with good demand so any demand hiccups (real or perceived - doesn't really matter) cause price problems. It remains to be seen if the "other" players in our market decide to buy anyway.
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6.75 soy target short term.. next 3 or 4 years lots will be gone
