Posted 3/11/2019 18:21 (#7374114 - in reply to #7374090) Subject: My Issue
South Central Iowa
I see a lot of assessor cards and land records. If you get one with a long history on it, it's shocking how many have a foreclosure record back in 1984-1988; literally 1/10th or better in this area of south central Iowa.
The other amazing thing is how many of the farm sales in this area are to investors. It's coming to the point where 1/2 of arms-length transactions are to investors in my area. Farmer's are not the ones buying farms here right now. I am also shocked by the number of active farmers who sell their farms to these investors; the lease back types. Georgia, Washington, California, Illinois, Virginia, Florida, Mississippi, Texas; all state names I have seen of recent.
These people are paying $6,000+ an acre for something they will get $180 an acre effective rent out of annually (actual crop acres - tax and mgmt). 90% efficient farm with $20 per crop tax and $15 per acre management and maintenance is $235 rent. This is 150-180 bpa ground. I literally wouldn't care at all if they got that cut in half. If it came it would be fun to watch them squirm in their investment that yields them sub inflation returns and would halve their value. If it did, many of those people would just sell out at a loss.
$3+ corn does not equate to any drop in land values though; absolutely no drop. Also, 220 bpa corn does not equal a drop at $3 cash either.