Posted by JD Seller on March 22, 2014 at 20:57:04 from (208.126.196.144):
My sons lost some cash rented ground in the last few years. Some of that ground they had been renting for years. They had taken good care of the ground and left it better than when they started on it.
Some high rollers started the $500 an acre rent bids and I told my sons to not get crazy and keep their eyes on the true profit of each acre. So they let the ground go.
Just recently several of those landlords have called them asking them to rent their ground again. It seems like the high roller's banks have clipped their wings back. Operating notes are smaller than they used to be able to get. So the April 1st payments are not going to happen.
I told them to meet the landlords but to not rent for much more than what they had been giving as the profitability is not any better than it was then. I also told them to get a multi year contract. This jumping around to the highest biding renter just is not worth it. You can't plan long term a year at a time on crop rotations and fertilization.
I have penciled out corn and beans with the high rents some are paying. Soybeans are always a loss and the corn with any yields under 180-190 BPA with $4.50 net corn (gross - drying and transportation)lose as well. An those numbers will be hard to hold as an average on many acres.
I am recommending that they be real careful on what they bid on rents.
Are you fellows seeing any backing off on the rents/costs?????
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