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Nebrfarmr
Veteran Advisor

Re: Land Prices Set To Rise

We have both kinds here.  I had a landlord/neighbor from Georgia, who was as good a landlord as you could ask for.  He was very concerned about leaving the land better than he found it, and we got along very well in that regard.  However, now that the 'younger generation' has taken over, it too has gone to the 'highest bidder'.

 

One thing I bet most of you don't have in our neighborhood, that we have, is big cattle feedlots.  In fact, I'm not too far away from the biggest feedlot in Nebraska (90,000+ head capacity).  They rent ground for high dollars, so they have a place to spread their manure.  State laws dictate you soil test, and test the manure, and apply accordingly.  When the soil gets too high in some things (I am not sure what) they have to cut back their application.  This is a good thing, as it stunts the corn anyway.  So, they farm a piece for 5 years, apply the max manure, and move on, leaving some nutrients depleted, and high levels of other things, which often takes several years to get back evened out.  Often, the same 'investment people' who buy up this land, are the same as invested in the feedlot.


On average, I don't think outside owners are any worse than any other, but in the area where I am, there are forces at work, that aren't in most places.

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Nebrfarmr
Veteran Advisor

Re: Land Prices Set To Rise

I look at it this way:
If prices stay high, like they are now, I already have enough acres to live off of.  I am about 2-3 years from being debt-free, and my landlord has stated emphatically that he wants me to keep renting from him, as he likes how I take care of the land, and cheapens the rent a bit, in exchange for that.  Anyway, if I keep making $200-$300 an acre profit, I don't need to expand.  I'd keep about the same size while the kids are in school, and have more spare time to spend with them.  If/when prices correct, I hope to be debt-free, and should be in a good position to gain a little ground.  I think I should still have 30 years of farming left in me, as long as I don't run myself over or anything like that.

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kraft-t
Senior Advisor

Re: Land Prices Set To Rise

Maybe you need to take out alife insurance policy on your landlord. Your profitablity may shrink considerably on his demise.

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dennymal
Veteran Contributor

Re: Land Prices Set To Rise

So you're saying that after this feedlot applies manure for 5 years the ground is worthless. Surely someone has to rent it. Sounds like an opportunity to me.

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Nebrfarmr
Veteran Advisor

Re: Land Prices Set To Rise

No, not anywhere near 'worthless'.  Just that the overapplication of manure, without proper balance, takes the top end of the yields off the corn crop.  It takes a couple years to get everything back to balance.

I have been told, that the best thing to do, is to plant to alfalfa for 2-3 years, then when you go back to corn, the yields are as good as they ever were, which is exactly what a feedlot that feeds lots of cattle would want, but not necessarily a cash row crop farmer wants, which may (or may not) take the top end off the rent for the next lease.

The corprate interests that run the feedlot, are just looking out for the feedlot.  They pay top rent for a 5 year lease, and when the lease comes up, it is less attractive to a row crop farmer, with the idea they will get it back at a cheaper price.

 The land that is owned byt the same investors that own the feedlot, I think the average farmer/renter can just wave bye-bye to.

 

Just do the math, and see what 90,000 head of cattle on feed eat in a day.  This is not the number of cattle fed in a year, that is the number on hand, on any given day.  The word on the street, is that they almost have enough land under their control, to be all self-supplied.   If that is the case, they really don't care what the price of corn does, as long as cattle stay high.

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Nebrfarmr
Veteran Advisor

Re: Land Prices Set To Rise

Believe it or not, his kids also like the agreement.  I pay rent based on county average yields, and price.  The kids agree that it is about the fairest way to rent the ground out, we get together, and pencil out about equal amounts of 'profit'.  They figure the taxes, upkeep expenses, and interest, and I use the expense calculator the local Co-Op puts out, and we pretty well split what's left.  Yes, it is a little cheaper than most rents, but even the kids so far have been very happy with the way the land has been improved.  They all saw the ruts, gullies, etc, and are much happier now that they are gone.  I have basically been told I can have the place, as long as I'm able to farm it. 

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steeringwheelholder
Senior Contributor

Re: Land Prices Set To Rise

I tend to think we will see a price plateau for land within a year or so. Name another product or commodity that grows 25% each year like farmland has. It can't continue at that pace for long, but will peak and move sideways I believe. Kraft has made an important point- where else "safe" are you gonna put money? .5% in a CD or land at 3%? Until interest rates rise, land will remain strong. Mainly because higher rates will discourage loans, and secondarily the return rates will compete with other safe investments.
kraft-t
Senior Advisor

Re: Land Prices Set To Rise

Good for you. I rented from one family for 27 years and then they sold the land to me.

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Kay/NC
Honored Advisor

Re: Land Prices Set To Rise

If those permtis are anythgin like ours for animal waste here in NC, they are likely hitting or closely approaching the limits of heavy metals, many of which develop toxicities for particular crops are certain points. 

 

It wouldn't be N, because that isn't "tested for," since it volitalizes, and the recommended application rate, if you are in an N-0based management plan, will be dictated by the crop's Realistic Yield Expectation (or, alternatively, proven with yield data over time) for that crop on that soil. 

 

It could be that they are getting too high in other major nutrients; for example, phosphorus levels are too high in the manure to fit more applications into the acres already used in the plan longterm. 

 

Given that you say there is damage to corn on the acres already applied to, I'd be more of the idea that the metals like copper or zinc, an possibly others, are accumulating to levels too high for that crop.  Then potential for damage should have been realized sooner, if analysis and soil testing had been correctly done, I would think.  Farms here are restricted from using acres with toxicity problems. 

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Kay/NC
Honored Advisor

Re: Land Prices Set To Rise

Ideally, a cattle operation would source nutrients for its own feedstuffs.  In many respects, that achieves the essence of reduction of carbon footprint for transportation of feed from far away. 

 

Scale is beside the point. ..it sounds like a good business plan, and one that eliminates - or at least significantly reduces - a large energy expenditure.   

 

We are seeing our integrator reconstruct facilities and restructure production pyramids to reduce many miles of feed hauling costs. This mostly involves moving finishing hogs, which consume the most feed, closest to teh feed mills.  Nurseries, like us, and farrowers are further afield. 

 

Transportation is the Achilles heel of the industry, both from biosecurity and cost perspectives...we just are exposed, both ways.  This should also provide some incidental - and hopefully intentional - biosecurity benefits as well.  You never know...

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