Thursday, March 31, 2011

Another good year?

The Minneapolis Star Tribune ran an article today looking at the prospects for "Another Bumper Year for Farmers", written by Mike Hughlett.

According to Hughlett's article, "With planting just around the corner, Minnesota farmers are feeling particularly optimistic. They're coming off bumper crops in 2010, and the federal government is predicting record farm income for the agricultural marketing year that ends Aug. 31. Perhaps best of all, prices for major grains are currently near highs not seen since the big commodity price run-up of 2008."

The article notes a couple reasons for concern, however. Apparently grain reserves are low, perhaps meaning "a bad crop could propel already high corn and soybean prices to heights that would hammer the livestock industry with higher feed prices and ultimately hurt consumers through higher food prices." Bad weather would obviously negatively impact the industry as well.

As farmers are gearing up for the planting season, the article notes that "There's extra reason for getting fired up this spring: Corn and soybean prices, as measured by May-delivery futures contracts, are respectively about 65 percent and 45 percent higher than they were a year ago." 

The article includes some quotes from Greg Schwarz, who grows corn and soybeans on about 1,000 acres near Le Sueur, and is president of the Minnesota Corn Growers Association. He believes that farmers are in a good position to lock in good profits, which is a "good feeling" for farmers. 

"Farmers across the country are considerably more positive this March than they were a year ago, according to a survey by DTN/The Progressive Farmer," the article continues. "The study is based on farmers' attitudes toward their input costs, profit margins and household income."

Obviously, this is a good time to be in farming, and that is good for farmland values. If you are interested in having your farmland appraised, or you think now is the time to sell your farmland, please contact me. I can be very helpful in meeting your farmland real estate needs.

Noah Hultgren

p.s. Congratulations to the MACCRAY boys basketball team for finishing 3rd in the state Class A tournament last weekend. We went down and watched all three games - way to go Wolverines!

Thursday, March 3, 2011

Cash Rent for 2010

I was just looking through the National Agricultural Statistics Service (NASS) Cash Rents for 2010 report, and saw a couple interesting trends. First of all, cash rents for non-irrigated cropland took some big jumps in the last year, and continue to be highest in our part of the state.

For example, cash rents rose about $10 per acre in Kandiyohi County, from $144 in 2009 to $154 in 2010; and jumped $17 per acre in Renville County, from $146 in 2009 to $163 in 2010. There were $20 per acre increases in both Chippewa and Yellow Medicine Counties; with both counties now hovering around $150 per acre cash rents.

The biggest year-over-year increase in cash rent for non-irrigated cropland happened in Dodge County, in Southeast Minnesota, which went from $177 in 2009 to $201 in 2010. The first and only county to break $200 per acre on average, Dodge County was at the top of the state for cash rents in 2010.

Cash rents in many of the most productive counties in Southern Minnesota are now hovering between $125 and $175 per acre; with more counties moving toward the $175 side of the equation. In our region and beyond, I found 26 counties where cash rents had climbed above $150 per acre. If recent trends continue, I could easily see maybe 8 to 10 more to hit that level in the next year.

If you have questions about your cash rent levels, or would like an appraisal on your farmland, please give me a call at 320-894-7528. I would love to help you get full value for your farmland!

Noah Hultgren