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Red River Valley | one can use whatever he wants to figure rent, The reality is that the landlord will come to the farmer and tell him what he will pay - and the Farmer will pay it because the last thing the farmer will do is let go of land. Then next spring/summer the farmer will all be crying that " the CBOT does not understand that the farmer can not make any money at these prices and prices have to higher our I will not plant anything"
As we know the last thing any farmer ever does is give up land because once you give it up you will never get it back.
He is my guess land rents will be up 10% at least next year not because of prices but because the land owner will tell them he wants 10% more and the farmer will pay it. It will take at least 2 years of farming at a loss before the farmer even thinks about giving up land and most likely will take his banker or even the bankruptcy judge to get him to give it up then.
One thing I am pretty sure about is that grain prices will have little or no effect on rent prices at this point, Unless of course they help push rents higher than the 10% I expect they will rise.
but maybe this time is different-----
as always time will tell | |
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