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:
Although worldwide agricultural productivity could take some of the bloom off the U.S. farmland market, Boehlje is not predicting a decline in U.S. farmland values. “I would be surprised if that happens,” he says. “We are not predicting a 1980s phenomenon. We are seeing a soft landing for land prices as well as profitability.”
That scenario could fall on its face if recent 20%-plus annual price hikes continue for a another year or two, especially if low interest rates don’t hold steady until 2015 as currently projected. “If that were to occur, there could be risk of downward adjustment,” Boehlje says.
To prepare for likely lower profits, Boehlje suggests holding the line on new borrowing and working to boost working capital.