A bit of all of the above. (Poll)
Richard Ohge 02/13/2012 @ 11:43am
Current Land prices are bubbling up explosively already. This isn't exactly alleviating the pressure for the long run. Reducing available land for sale may stave off the bubble's bursting a while longer, but without the continued very high market returns, the rentals could become suddenly burdensome. Then on the issue of new Farmers, the extreme high land prices may continue to be just one more hurdle for them as they attempt start-ups. The USDA has the onus and money to start 100,000 new Farms this year. Land prices will take some of the bang out of the budgeted bucks for these new farmers and put them in the position to be upside down on their notes 5-7 years down the road. Leasing to the highest bidder is only good for the lessor-no one else is really benefiting.
True Rental Value
John Plagge 02/09/2012 @ 12:37pm
You also have to take into consideration that is auction was held in February, months after the majority of rental argreements have been finalized. This was a way for some to add more land after the fact. The auction also allowed the the tracts to be re-auctioned a second time allowing non winning bidders to up their bid. If you went to a farm auction, were the high bidder on a tractor, and then at the end of the sale the auctioneer started bidding again on your "new" tractor, would the second high bidder bid one more time, or another bidder jump in. That is how this auction was handled. I see these as inflated prices, and if you know the quality of ground, it may be.
Marvin Amdahl 02/07/2012 @ 7:23pm
what about fertilizer tests or do they get to mine the soils for 2 years
Jeff Caldwell 02/08/2012 @ 8:09am
Hi, Marvin. Very good question. Based on my conversation with the auctioneer who conducted the Mason City, Iowa, auction, it sounds like that may not be an issue with most of the winning bidders, since many of them have been on that land for a long time -- one he said has been farming the land for 25 years. So, though that may be possible for some of the winning bidders in some situations, the ones who have been farming it long-term probably will avoid practices like that.
But, you're right -- that's certainly another potential danger in handling your land this way -- as a landowner, if you're doing this rather than outright selling, you open yourself up to things like "mining." Hopefully, that won't happen here!
are these rental bids annual or for the total 2 ye
chris brain 02/07/2012 @ 12:43pm
Re: Re: are these rental bids annual or for the total
Jeff Caldwell 02/07/2012 @ 1:44pm
Good question, Chris. Sorry for the confusion there. The numbers quoted here are for rent per year, but the auction was for 2-year leases.
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