2013 Buyer's forecast: Farmland myths

What is in this article?:

Uncertainties abound for corn and soybean production in 2013. Potential drought, crop insurance payouts, and commodity prices are just a few major unknowns. To help growers prepare for the next year, Farm Industry News put together a buyer’s forecast of interest rates and the costs of production inputs and land. Featured here is an overview of common farmland myths.

The rest of the input forecasts may be found here:

Crop protection    Seed    Fertilizer    Interest rates

Farmland    Fuel

Photo: Mike Krivit

They’re not making any more farmland, right? Wrong.

“Don’t believe that myth,” advises Mike Boehlje, an agricultural economist at Purdue University.

The Corn Belt hasn’t expanded as if by magic. But the red-hot commodity prices of recent years have stimulated a dramatic increase in new land coming into production around the globe, Boehlje says. In addition, productivity of existing farmland continues to climb as high prices justify more intense management.

All of which means that the globe’s agricultural productive capacity is increasing — and it won’t be shrinking any time soon. There are other myths to take on, according to Boehlje. Contrary to recent history, agricultural exports won’t continue to increase as dramatically as in recent years, although they are likely to remain relatively strong. Ethanol demand won’t continue to grow topsy-turvy either, having reached a plateau based on achieving production needed for the 10% ethanol blend mandate.

“This should result in some moderation of the excitement about continuing rising land values,” Boehlje says.

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