Department of Agriculture's CCP Forecast for Corn in 2007-2008

gcmaxwell@yahoo.com — Sun, 13 Apr 2008 08:40:00 GMT

By clicking on the link, you can access the US Department of Agriculture's Projected price of corn for 2007-2008.

http://farmerlandlord.terapad.com/resources/13110/assets/Department of Ag's Projected Corn Price.xls

Why the Farm Landowner Should Care About Farm Commodities

gcmaxwell@yahoo.com — Sat, 12 Apr 2008 17:48:00 GMT

The landowner should watch the farm commodities market because it effects how much you can make on your investment. If you are new to owning farmland as an investment and know nothing about commodities trading, the commodities market can be fairly intimidating at first glance.

Then as a landlowner how much do you need to know about the commodities market. The answer to that question depends. If you farm on shares (i.e. for a portion of the harvest), you obviously need to watch the markets closely and perhaps make decisions about selling your crop at a profitable price. (For the difference in cash rent and farming on shares please see related article in the category entitle rents). There is more on this site about the basic of marketing your crops in the upcoming article on marketing strategies. If you rent for cash, you still need to follow the commodities market because commodities indicate how much you can charge for rent.

When the commodities are up as they are now to the $4.00 or $5.00 dollar range for corn, it represents between a $1.60 and $2.60 more per bushel than the average price four years ago of $2.40 in August 2004. (See government changes in the US government's estimated average price for farmers at www.ers.usda.gov/Data/PriceForecast/ which are also available on this website in the assets section.)

You should try to price your rent to be the same percentage as it was prior to the run-up in prices. Obviously if you are not watching the commodities market its difficult to know when to ask for more rent.

Here is an example of how the commodities market has changed the situation. If you originally set your rent at $155 per acre on land averaging 165 to 200 bushels per acre based on corn prices of $2.40 (average revenue per acre of 396 to 480), rent represented between 39% and 32% of the revenue for an acre. The additional uptick in commodities prices to $4.00 means the farmer should bring in per acre revenue of $646 (at $4) at 165 bushels per acre or $800 at 200 bushels per acre. To maintain the same percentage band, rent should be around $250.

In conclusion, landlords need to watch the commodities market and at a macro level understand it. When prices are up, you can govern your expectations and demands for rent. While it may be acceptable to demand more rent in this current climate, landlords will need to remain flexible if or when commodity prices fall. For the basics of the commodities market, see the article that sets out the basic terms and definitions.

Renting Land To Farmers: The Landlord's Perspectiv launches

gcmaxwell@yahoo.com — Wed, 09 Apr 2008 19:43:00 GMT

Renting Land To Farmers: The Landlord's Perspectiv, powered by Terapad.com (http://www.terapad.com/) was launched today featuring online shopping, forums, image gallery, event calendar, blog, and more.

Renting Land To Farmers: The Landlord's Perspectiv can be accessed at http://farmerlandlord.terapad.com/.

Renting Land To Farmers: The Landlord's Perspective

Department of Agriculture's CCP Forecast for Corn in 2007-2008

Why the Farm Landowner Should Care About Farm Commodities

Renting Land To Farmers: The Landlord's Perspectiv launches