Inconsistency is what I saw or interpreted from the events of last week. I participated in two different meetings and the theme was of tighter margins and more financial problems this winter than in the past number of years. Yields were good, but the extended harvest and low commodity prices continue to erode working capital and that will lead to some tough decisions for Ag bankers and their clients. USDA stated today that farm incomes will drop by 9% this year from 2017 and be just slightly above 2016 (the most recent low since back in 2002). Ag lenders expressed some concerns for further softening of the land markets.
Halderman Real Estate conducted 5 live auctions last week and all were successful – some extremely so! Those results don’t match the negativity we hear from the news media and at industry events – so which way are we headed? At the end of the week LandOwner newsletter arrived containing their annual fall survey results. Those results suggested steady land values and cash rents in 2019 based on the opinions of all who participated. In fact, the number of people interested in buying land in 2019 increased from those interested in 2018.
That’s the world we are in today. The Farm Bill is mostly done and the news is mostly positive for landowners. The G-20 meeting Friday and Saturday indicate some good news on the trade front. Therefore, in spite of poorer incomes in some instances I tend to agree with the ProFarmer survey – there are enough operators out there who priced their grain early, use crop insurance and had good yields resulting in a slightly positive income outcome for 2018 that the market will remain steady until either the bottom completely drops out or there is more upside in prices.
If you need help working through these difficult pathways Halderman Can Help. Call your local Halderman Area Representative or me in our main office at 800-424-2324 to talk about your specific needs, your property and your options.