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| There is going to be a bit of a wait and see deal with landlords that are generally comfortable with tenants. While there isn't a compelling reason for market prices to rally back into the $4 to $5 range, landlords have watched prices fall and come back strong at least once before. Perhaps it's time to agree to do business together and maybe set a few parameters if you can, but I'm thinking there is no rush to set prices. On the other hand, if you are paying high rent and send the same contract to the landlord it will get signed in a big hurry. The guys farming at a loss or near loss with all time high grain prices are not going to be in a position to push rents as they did before. The insurance hedge is diminished with ACR being very county dependent on coverage level. High cost farming due to new equipment (necessary for limited down time) and getting equipment moved over great distances will be less appealing (especially to the banker).
Of course landlords chasing the highest rent are not anyone's landlord for long, though they may end up back at your table eventually anyway.
John Phipps had an interesting editorial on banking where is local bank was being bought out as his banker retired. I see small banks doing this as the folks willing to do the work necessary to keep a small bank running dwindle (a little like livestock). John's point was the rules will now be more about numbers than relationship. If your numbers indicate you need a hail marry pass to score a touch down on every play, 32 yr old Joe/Josephine banker is going to look at his screen and say no. I guess I see a lot of 'enabling' having occurred over these past few years with lenders being willing to finance what looks like a no win situation. Usually they are first in line to get their money back if there is any, so it may have worked out. Maybe it is/was as much an ego thing for the banker as it was for the 'farmer'. The trend will be for less of this type of thing to go on simply because it's not in the corporate rule book. | |
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rent for 15
