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deep SW On. | If its like the past it takes at least 3 yrs. of losses to make banks nervous but mostly its 5 yrs. before the wheels fall off....interest rate debt crisis started around 1981 and land didn't bottom out until 10 yrs. later, machinery took maybe 2 yrs. ......some guys are always in trouble and live on the edge , if the future is $3 corn things could get bad, $5 corn it will keep chugging along.........in '70-'80's IF spouses worked they where mostly low paying ,part time jobs now some wives make the big bucks , crop ins.,RMP,ect. takes care of 1-2 bad yrs....what is tough is guys that have had drought-floods and missed the last 2-3 yrs. of high prices and took on considerable debt.......not sure if everyone is as flush with cash as some say as dealers quoting on machinery are really pushing "we can finance X # of yrs. at X interest" where if it was all cash purchases it would be X $ with a X cash discount ........ reaction period too changing prices on the farm is pretty slow, how many guys that are paying more for rent than they can pencil out will ask for decrease or give up those farms? Not if but when interest rates make a big move then the pain will start , when rates move its like a move in commodity prices,generally slow and people think its temporary and by the time they realize what happened its too late. Nobody wanted too sell $5.50 corn ahead when it was $7 cash , now a lot would get delivered for a $5.50 bid.....a guess by all in the end | |
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Anyone hearing a few rumblings in their community
