Cl4—Lancaster Farming, Saturday, May 17,1980
It’s Spring, the time when
young men’s fancies nor
mally turn to thoughts of
love, or at least that’s what
the poets think.
Believe me, young far
mers think about a lot more
than that. Their thoughts are
more apt to be on farmland
and what they can grow on
it.
In fact, they’ve been
thinking about farmland for
several months, doing what
they can to line up the acres
they need for a successful
year. Farmers, young and
old, have been bidding
against each other over the
past few months for much
needed land that costs too
much to buy and probably
even too much to rent.
Those rumors beard in
coffee shops and farm
meetings this Spring about
$lOO an acre rentals are
probably true. Around here
that may seem like a lot of
money, but in the Midwest
that’s actually cheap.
The latest survey of far
mland rental rates, reported
in Successful Farming
magazine, is downright
shocking. Throughout the
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Midwest, farmers are
paying $lOO and more per
acre to rent com and
soybean ground.
The highest figure
reported was a truly
outrageous $lBO an acre in
Illinois. Granted, it’s good
land, but it’s hard to see how
that farmer will make ends
meet m 1980.
Other samplings - and
these aren’t just idle gossip, -
- give reports from farm
bankers ranging from as low
as $5O an acre for dryland in
Nebraska to $l5O in lowa and
Illinois.
It’s hard for me to see how
a farmer can pay $l5O to rent
an acre of ground that will
produce 135 bushels of com
that will sell at considerably
less than $3 a bushel.
An Indiana banker says
good farmers in his area can
make a profit paying $lOO to|
$l2O an acre for land. But
anybody paying more than
that in his words “is
probably farming for the
experience unless he has a
specialty crop.” And for the
marginal operator, the
figures even $lOO an acre is
too much.
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An Illinois Production
Credit Association specialist
- agrees with that, pointing
out that in view of
skyrocketing production
costs this year, farmers will
find it extremely difficult to
make a profit above $l2O an
acre.
An lowa PCS banker says
$l5O an acre is an extremely
high iand rental. He figures
$llO an acre production costs
and interest, $35 to $4O for
machinery depreciation and
interest - that comes to $l5O
plus the $l5O for the land
rent, equalling $3OO. With
those kinds of costs he says a
farmer needs $2.30 a bushel
for com to break even. And
that leaves nothing for labor,
management and profit.
So how do local farmers
compare? They’re paying
anywhere from $5O to $9O an
acre for then- com and
soybean ground and with
good management are
getting those 130 bushel
yields the Midwest farmers
are talking about. With
irrigation and top production
know-how some are domg a
lot better. But it’s still a real
question for a lot of eastern
fanners whether they should
be paying $75 or $BO an acre
for ground when their far
ming history shows their
average yields are no more
than 100 bushels per acre.
It’s hard to compare that
good deep central Illinois
farmland with some of
Sussex County’s drouthy
acres. About all a farmer
can do is look at the history
of crop production m his
area.
How many years has he
been hit by a drought? What
have his average yields been
and what are his production
costs? Then look at the gomg
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land rents and make a
decision
Obviously,. the. decisions
have all been made for 1980.
And as the Indiana banker
pointed out, some farmers
may be farming for the
experience.
For them this year’s ex
perience should include the
true worth of a rented acre.
Before another year rolls
around, they should know
exactly how much they can
afford to pay. And regar
dless of what rented land is
going for, they need to know'
what it’s actually worth to
them.
There’s a tremendous
difference between paying
too much to buy an acre of
farmland and paying too
much to rent it. The buyer
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almost always comes out
ahead because of spiraling
- land prices and mind
boggling inflation. The
renter doesn’t have that
opportunity. If he pays too
much rent, he just loses
money.
So what’s a farmer to do if
the going rate seems to be
more than he can afford?
Perhaps take another look at
his production practices.
Fmd a way to increase yields
so that he can make a profit.
Switch to higher value crops
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.
People who go to diet doctors often have a wait problem,
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Use m any stable or animal
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become slippery when wet.
• Cow Stables and Runways
• Hog Pens
• Sheep Stables
• Dog and Cat Kennels
• Chicken Houses
• Other damp areas
See your local dealer.
Double crop so the rent is
spread* over more income.
"Look for ways to cut costs
and perhaps most im
portantly, consider cutting
back - giving up those high
priced rented acres that
don’t really make a profit.
It takes good records to
know all that and it’s not too
late to set up the kind of
record system that would let
a farmer know on a per fielc
basis the profitability of his
operation.
r
FOB Our Lot
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