EC IA | Joe Junior - 8/25/2024 13:58
I have no quarrel with you, just playing devil's advocate. I am a farm owner. Why do you price other imputs and then see what you can pay me? Why don't you get my price and have your other suppliers cut their price to make it work? Do you have that little of respect for me? You want me to come down in price so you can afford the other costs even if they go up. Kind of looks like you want me to pay the increases instead of you.
Same deal, no quarrel but going to play devil's advocate back:
Because that's how the value of the land is decided. You have the same product/input available as every other landowner. If you have land that yields 25bpa better than the guy down the road, it will be worth more, just like if Seed A will yield 25bpa better than Seed B. If you want to set a price, go for it, but if it's higher than the return justifies, you won't make the "sale" and will have to lower the price or not get a rent check for the year. You bought an asset that is valued based on what it can produce, and when the value of that production decreases, so does the value of your asset. The only way I see around that is price fixing, which requires few enough players in the game....
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Pioneer’s Iowa State/County Yield Estimate
