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Panhandle of Ne. | A lot of discussion has been raised about the current low interest rates compared to the 80's. I did a little research and found the interest rates peaked at 20% in 1980. I remember buying a new JD 4840 in '80 for 41k, fully loaded for the time. I believe the only "options" at that time was factory duals and an am/fm/cassette radio. Diesel was 82 cents, AA was 195 and I was a pioneer seed salesman from '77 to '98 and IIRC, seed corn was around 50-60 per bag for the latest/greatest. A new chevy pickup loaded 4x4 was around 10k. There is no need for me to list what tractors, farm ground, inputs, pickups etc. cost now, everybody is well aware of these costs.
This info is from Iowa State http://www.extension.iastate.edu/agdm/crops/pdf/a1-21.pdf.
In '80 avg. COP in Iowa was 303, avg yield was 115 bu and avg. COP was 2.64 per bu. In '14, avg COP is 782, avg. yield was 177 bu and avg. COP is 4.43 per bu. Avg price in '80 was 1.80 and currently it is +- 2.75. Using these figures, farmers in '80 were 84 cents per bu under COP and 1.68 per bu under COP currently.
I'm not debating anybodies COP as there are to many variables. I'm as happy as anyone that interest rates are where they are now. But, a person could argue that instead of paying 20% interest like in '80 we are paying it in upfront costs because of the ridiculous prices of our inputs, equipment, repairs etc. A person could also argue that we were better off in '80 than we are now at the current price of commodities.
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Interest rates. Something to ponder on a Saturday night
