Farmland Trends for 2016

October 28, 2015 02:22 AM
 
Farmland Trends for 2016

Farmers will tolerate high rates another year, national survey says

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Although many producers aren’t afraid to walk away from high cash rents, most will tough out high rates yet again. That’s from a new survey of 560 Pro Farmer members and LandOwner subscribers. Both are members of the Farm Journal Media family.

Fully 40% say they “probably” or “absolutely will” walk away from cash leases for which rates aren’t lowered in 2016. Yet 60% say they “probably” or “absolutely will not.”

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“It emphasizes how important it is to the long-term financial success of the farming operation that producers are willing to likely lose money in the short-term rather than abandon the ground to cut losses,” explains Mike Walsten, editor of LandOwner newsletter. “It reflects the reality that once control is lost, the chances of getting the ground back when the profit outlook is better is closer to 0% than it is to 50%. Way closer.”

One mitigating factor might be that 73% expect lower rates in 2016. 

“We are fortunate to have understanding landlord and have a flex lease,” wrote an Iowa survey respondent. “We try to be fair with each other. They believe caring for the land properly is more important than the high unfair rental rates some are getting.” 

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To get more survey results and the latest trends in land values with Pro Farmer’s Annual Land Report, visit profarmer.com/land-report-request. 

 

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