Thursday, December 8, 2011
$20,000 an acre for farmland
Two farmers in Iowa wanted an 80 acre parcel bad enough they bid $20,000 an acre for the parcel! The farmer across the road was the "angry loser," and the dairy farmer just down the road had the highest bid.
To give you a hint, the parcel wasn't that far from where I snapped this picture two months ago. A farm just sold near this combine for over $9000 per acre.
The subject has been highly debated on Crop Talk as most farmers sractch their head wondering why in the world would any farmer bid that high on a parcel for farmland. It doesn't pencil out in any normal computation.
There has to be a lot to the story we don't see like the dairy farmer needed the land to spread manure on and perhaps a lower cost of production because of that. More likely he produces more dollars per acre with his dairy herd, still that amount of money is hard to figure farm wise.
I sent the thread to several friends as New Zealand prices are mentioned in the thread and one responded this way.
"Ed, Two points:
● The price of gold never changes, only the value of your currency changes, the same for land (lookout) dirt cheap!!!
I understand land prices are not related to production anymore, money has no value anymore (food is the value)
● Our price are now double that, I will enter it twice so you can't say I have made a typing mistake (double that, with currency and ac/ha correction)"
That is how my friend "down under" sees the discussion. What do you think?
On a different note I found a 2,000 acre farmer yesterday who was satisfied with his soybean yield until I brought him up to date what others got this year. He had never heard of Liberty Link soybeans!
I didn't laugh at him, I just smiled and explained the system. He is a busy machinery trader and trusts his supplier for seed and chemicals. That supplier is Round Up Ready only and never brought his customer up to speed as to what is out there for competition.
For the amount he is spending, he could grow non GMO soybeans just as cheap and perhaps get better yields but he could use Liberty Link and increase his yield with the same or lower cost of production.
He thanked me over and over for bringing him up to speed. Now I bet his supplier has some explaining to do!