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Senior Advisor

Re: The Federal Reserve current Economic/Money Supply actions and how to Protect your Family/Ray

If you think we are facing a situation much like the 80's, then you ought to be selling land hand over fist. We brilliant buyers of the late 80's are the same brilliant guys not selling now.

 

Then there are those of us that are intergenerational buyers and owners. Our heirs will get our land no matter what it is worth. It's their job to accept what they get and make the most of it. And that means to protect those assets or sell them and reinvest the proceeds in hope that they will provide a boost up for the next generation.

 

BTW I don't total up my assets every day. Sometimes I go a week or more. I doubt whether these farmers are impressed with either of us or whether our land is worth $5K or $15 K.

 

I also would like to see your soil maps. Those with 90 CSR. I suspect you may have quality land but i doubt whether any of your vast acres average close to the numbers you state.

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Senior Advisor

Re: The Federal Reserve current Economic/Money Supply actions and how to Protect your Family

What amuses me is farmers investing 90% of their assets in farm ln land and then hyperventilating that they might have to borrow some money or sell one parcel to satisfy estate taxes. There is nothing  prohibiting them from holding a million or two in cash so that it is physically ready to satisfy those tax obligations.

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Advisor

Re: The Federal Reserve current Economic/Money Supply actions and how to Protect your Family

rsw- LMAO!  one of my best friends was a radiologist then he went to Uniersity of Oklahoma to pick up his medical degree in Psychiatry, he has since became an employee of the VA in Indiana where he can sit down while dealing with real psychos. I think he could have earned a good living here in Iowa treating farmers. LMAO!

 

.  I think you will find that radiologists and other Medical Professionals will soon be earning less than a plumber.

 

 Medicine changed, being a doctor is a dogs life, and most spend their earnings paying alimony to the first and second wife, and child support for those kids they had with them.   I would suggest your daughter avoid lawyers, doctors and maybe even engineers, because all these profesions will soon be shipped to India.  

 

A doctor is not going to make much money as an employee for a hospital or insurance company. LMAO!  Maybe she should consider becoming a farmer.   Adios Amigo. John

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Senior Contributor

Re: The Federal Reserve current Economic/Money Supply actions and how to Protect your Family/Ray

I only have one farm that averages a 91 CSR Rating. It was the farm that my father-in-law gave us as a wedding present back in 1985 when we got married. It is only a 1/4 section, not a 1/2 or full section by any means. And as hard as my wife has made my life at times, I should have gotten over 1,920 acres or 3 FULL SECTIONS to have married her!!!!!!!!!!!!!!!!!!!! Oh well, live and learn. Most of my other land is just around an 80 CSR and I have one farm that is a 78. But as you know, CSR Ratings don't tell the whole picture, they are really only a general guideline to use, say in comparing one farm to another. I have 30 acres of a 66 CSR Rating soil on one farm and it always does over 210bu, but I also pattern tiled most of this 30 acres on this 1/4 section corn field. But what I am saying is that you shouldn't use Iowa CSR numbers as written in stone, they are only one of the guidelines to use in purchasing a farm, in my area drain tiles are extremely important. I have lost a Million times more corn yield to water-logged soil than drought. And I don't mean overland flooding where 1-3 feet of water sits on the field for weeks at a time. Just plain old wet, waterlogged soil. Corn starts to turn yellow after sitting in too wet of dirt for awhile and we can lose alot yield from the corn. This is not the yellow streak you get in the middle of the corn leaf when the plant runs out of nitrogen either.

And on the 1980's, I just do not see that happening in the rest of 2013 or even 2014. Actually, using the past 75-100 years of cash rent Ratios to land values, all the ROI, ROA, ETC Ratios, farmland is slightly undervalued using a $5.50 corn price and valued correctly at a $5 corn price, and overvalued slightly by maybe $500 to $1,000/acre at a $4.50 corn price. Also remember during the Farm Crisis years and leading up to it, it took like 10 years to play out total. Farmland values peaked in 1981 in my area and took a very long time period to finially bottom out in value during 1986. A 5 year scenio from peak to bottom, that's a very long time period in economics. And then in 1987, farmland vaues went uo by 24%, this showed that the bottom had probably exceeded what would probably have been a normal market low. I just know in 1986 when I bought alot of land, the Cash-Rent to value ratio was as high as 14%, hell you could even put land in the CRP Program and get a 12% Return. Also in 1986, I believe it was the only time in the past 100 years of data on Iowa farmland, that with just a 10% downpayment, the corn profits were enough to cash flow the purchase of farmland. That is an extremely, extremely, rare event in the history of farmland. Farmland never, ever, cash flows with just a 10% downpayment, I thought I had died and gone to FARMLAND HEAVEN!!!!!!!! I was one very happy camper in 1986 to be able to cash flow my land buying with just a 10% downpayment. I borrowed so much money I was over-leveraged and had no business having a Debt/Equity Ratio that I did in the late-1980's. But with just a new wife and no kids at that time. well you take alot more chances than if your wife didn't work and you had 3 small children to feed.

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Honored Advisor

Re: The Federal Reserve current Economic/Money Supply actions and how to Protect your Family

As the kids say, "True dat!"

I never know how to take such a ridiculously sexist post...surely, this one was a joke! To think that a supposedly intelligent man would plan this way for a female child in 2013 is absurd...get a degree, work four years, get married for money. Poor kid.
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Senior Contributor

Re: The Federal Reserve current Economic/Money Supply actions and how to Protect your Family

Yes Kay, I was joking about my daughter marrying a Doctor!!!!!!!!  Of course if she does bring a Doctor home to meet me and he asks me for my daughters hand in marriage, I would be one happy camper!!!!!! No, as long as the guy has a job and she loves him and she will be happy, that's all that matters.

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Senior Advisor

Re: The Federal Reserve current Economic/Money Supply actions and how to Protect your Family

Everyone knows that true colors eventually shine through. Great post RSW, true gentleman.
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