| JUST LEARNING - 1/23/2015 15:31
In my case yes I will still be paying the same because rented acres only makes up around 6% of my acres. I understand your point. I'm in the boat that thinks rents should be based off of land values. If land values haven't fallen, why should rents fall? If land is holding it's value then it would seem that farmers feel the current price is fair. Guys want to bid 8000 per ac, but only want to pay 150 in rent. Something doesn't add up there. How much would you rent your owned acres out for? Take that number and subtract off labor cost and that should be pretty close to what you should be paying.
My opinion (worth what you paid for it) is you have that backwards.
Land is an investment.
The value of any investment is related to the expected return from that investment and the perceveid security of that investment.
If you take the return on that investment away, the value of the investment will drop dramatically.
If you take the security (probability of being able to maintain possession of the investment) away, the value of the investment will drop dramatically.
In this situation, the number of dollars an acre of land can return has greatly diminished. Many will be in denial, but if this trend remains it is inevitable that land prices will fall and yes, land owners will take it on the chin. This is reality. |
Talked to a banker.....
