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| I think it's a leftover idea from the 90s and early 2000s that the first few years of a farm mortgage will be rough, but halfway through you'll start making money and the last leg of the mortgage will be easy. They're all going to be rough. Land that is being bought for $20k an acre in my county that yields 210bu corn is not going to cash flow in the next 20 years. We would have to have $10+ corn to break even right now with conventional financing. Do you see that happening to corn, and/or inputs drastically decreasing going forward? I personally don't.
If land continues to appreciate and is worth $50k an acre in 2040 things will be beautiful on paper. I have no idea who will be buying $50k ground to raise $4 corn on but I'm sure some will try. | |
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Rental Income Breakdown and K Shaped Economy
