EC Nebraska | 4450 - 10/6/2017 08:13
The acres will all get planted to something. The genetics are showing we can still produce a lot under less than ideal conditions. Not many areas where demand can increase. No farmer will cut back as shown in a previous thread. Looks like mother nature is the only hope for reducing supplies and you just hope it's not your area taking the hit.
There is a price point at which some acres will go idle. What exactly that is, I don't know, but it is probably significantly lower than here. And, unless Mother Nature intervenes in a big way and/or demand really increases, we will see that point in the next few years. We have to, or else we'll bury ourselves in a mountain of grain that chokes us.
I would like it to be a relatively short, severe drop that forces a rapid reset of land costs, but I don't expect that. I expect it will be a bit slower bleeding that goes on for multiple years until enough land goes idle to clear supplies. It's just human nature refusing to let go of the dreams of high prices.
Some land will adjust downward more rapidly, and will remain in continuous production. It will be the land that requires a bankruptcy or two to adjust down that will go idle for a season or two.
Actually, the report was that some land near Grand Island lay idle this year because the owner wanted too high a rent. That kind of thing will increase with lower grain prices. It's not that most land will go idle, it won't. But some will, and price will find the point where enough does go idle. (or ceases grain production, at any rate. It might graze cattle, it might get hunting leases. But it will stop producing any grains.) |
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