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THE COST OF FARMING<br />
“This land market has been remarkable.<br />
What it’s done since March of<br />
2021, it’s been a rocket ship since then.<br />
It used to be when you had a farm appraisal<br />
done, you could count on it being<br />
accurate for a few months because the<br />
market wouldn’t move that fast. We’ve<br />
had appraisals done here where three<br />
months after the appraisal is completed it<br />
really almost can’t be used as a guidepost<br />
anymore because it’s moving so<br />
fast,” Bopes said.<br />
He said he engages in ongoing conversations<br />
with his landowner clients,<br />
discussing many factors, including what<br />
it takes to put a crop in the ground. Good<br />
communication is key, Bopes said.<br />
“I do anticipate we’re going to have<br />
those conversations coming up. We always<br />
try having an ongoing conversation<br />
with our landowners because the rent<br />
equation works both ways. That way we<br />
avoid huge swings,” Bopes said.<br />
According to an Iowa State University<br />
survey released in June, stronger<br />
commodity prices and farmland values<br />
are leading to higher cash rents across<br />
most of the state. The most recent annual<br />
survey of cash rental rates for Iowa<br />
farmland showed that rates increased an<br />
average of 10.3% in 2022, to $256 per<br />
acre.<br />
This is the third consecutive and largest<br />
uptick in cash rents since 2013, when<br />
rents peaked at $270 per acre – a level<br />
5.5% higher in nominal terms than in<br />
2022. In comparison, nominal corn and<br />
soybean prices received by farmers in<br />
Iowa declined by 16 and 11%, respectively,<br />
since mid-2013.<br />
“The challenging part in general in<br />
the last 12 months would be people are<br />
looking more at asking if this is the tiv<br />
tme to sell. Land markets have exploded<br />
and rents are following pretty closely,”<br />
he said.<br />
Eastern Iowa farmers will be closely<br />
watching the land values and cash rent<br />
prices, the experts said.<br />
“Liquidity is important,” Lasack said.<br />
“Cash is king when it comes to weathering<br />
bad years and being able to expand<br />
in good years. If you are solid from a<br />
debt standpoint when times are bad, you<br />
might have the opportunity to expand<br />
your operation and have the cash to do<br />
that.<br />
Hart advised setting aside funds for the<br />
future and looking at how to control and<br />
manage costs.<br />
“It’s not a deal of saying things are<br />
always going to be good or bad. It’s a<br />
question of how do we use these good<br />
times to prepare for bad things. Think<br />
about what you’ve done over the past<br />
decade – 2021 looked like 2012. How<br />
did you prepare yourself then? What lesson<br />
did you learn? How did you prepare<br />
yourself?” Hart said.<br />
“It’s is always a roller coaster,” Hart<br />
said of the agriculture industry. “It’s<br />
smart to save for that rainy day. I look<br />
back at profits from the last couple of<br />
years, and two three years from now, that<br />
will be the cushion.” n<br />
Since 1972, the Breedens<br />
have been selling Iowa’s<br />
leading hay equipment<br />
Let Bob and Calvin<br />
help you with all<br />
your baling needs.<br />
Bob Breeden<br />
Josh Breeden<br />
Jordan Breeden<br />
Calvin Breeden<br />
563-686-4242<br />
breedensales.com • email: c4balers@netins.net<br />
17047 167th Ave.<br />
Maquoketa, Iowa 52060<br />
68 EASTERN IOWA FARMER | FALL 2022 eifarmer.com
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