Archive for July, 2009

UPDATING FARM LEASES IN ILLINOIS

Friday, July 31st, 2009

Recently, we have had a few clients contact us who are reviewing their lease situations.  These clients have cash rent leases expiring in 2009 and are looking towards 2010 and beyond.  One helpful resource for landowners that are in this position of needing to renew leases for next year is Farmdoc.  Farmdoc was created by the University of Illinois to give farm landowners and operators the tools and resources needed to succeed.  Under the Farmdoc Management section, users will find resources such as historical cash rent breakdowns for the state of Illinois as well as PDF and Word versions of crop share and cash rent forms.  If you will need to be updating your lease for 2010 I would recommend taking a look at the Farmdoc website.

Has anyone ever used Farmdoc, for leases or any other of the tools that they offer?  Let me know your thoughts at eric@loranda.com.

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THE POLITICS AND ECONOMICS OF FARMLAND

Monday, July 20th, 2009

It’s not often that we get heated phone calls regarding the content of our company newsletter.  That said, apparently the lead article in our July 2009 LandFacts, where I discussed the effects of government policy on farmland values, got a few people riled up.  One caller to our office stated… “Kudos to Mr. Moss for an article magnificently written and well done.  He spoke to a minority of us – he has our support.”  A second caller saw things differently “Mr. Moss is obviously some right-winger intent on undermining our government.” Wow – I didn’t know that the farmland topic could be so controversial!

For those who took the time to carefully read the whole article, you will note that I never singled out any individual or political party.  In fact, I think the blame for our current economic mess should be spread on both sides of the political aisle. In addition, the thrust of the article was about economic issues and not political ones (it never ceases to amaze me how people can read into something whatever they want).  The bottom line and my point – government action can alter the landscape of an entire industry and the farmland asset is not immune to these forces.

Now I know what Grandma meant when she said… “unless you want to get a fight started, never talk about religion and politics”…  Agree? Disagree? Send your thoughts to loranda@loranda.com

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THE NEW PICKENS PLAN

Tuesday, July 14th, 2009

Do you remember during the summer of 2008, and last year’s presidential campaign, when Texas businessman, T. Boone Pickens, was promoting his plan of energy independence by utilizing wind energy and natural gas as a way to wean America off of expensive foreign oil?  Well, according to a recent report by Dallas Morning News reporter, Elizabeth Souder, the plan has changed because of both financing and electric transmission difficulties.  It now appears that instead of building one large wind farm in a remote Texas panhandle area, that Mr. Pickens will attempt to help build several smaller wind farms that are more closely situated to population centers, and where electric transmission lines are already in place.  To read the full article, click here.

Is Mr. Pickens wasting his time and money, or are wind farms the way of the future?  Let me know what you think by e-mailing me at doug@loranda.com.

Source: Dallas Morning News

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THE EVOLVING CREDIT SITUATION FOR RURAL BUSINESSES

Friday, July 10th, 2009

In the latest edition of Main Street Economist, the author, Brian Briggeman, examines the credit outlook for rural business owners and farmers since the downturn in the economy in 2008.  Briggeman explains that all borrowers, even high net worth farmers, have experienced more difficulty in obtaining loans.  Furthermore, even when those loans are secured, more collateral is being required the lending institutions.

The article speculates that the flow of money from the recently implemented American Recovery and Reinvestment Act, along with loan guarantee programs being offered by the Farm Service Agency and the Small Business Administration, may relieve some of the pressure we have seen in rural business lending.

The availability of credit for farmers and farmland investors will be an important factor to keep an eye on as we progress towards the end of the 2009 crop year.  If potential buyers in the farmland market struggle to obtain financing it could have a very real impact on farmland prices this fall.

To read the entire article, continue here

Where do you see the credit market in rural America headed?  How do you think the farmland market will be affected?  E-mail me your thoughts at eric@loranda.com

Source: Federal Reserve Bank of Kansas City

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THE OUTLOOK FOR A REBOUND IN AGRICULTURE

Friday, July 3rd, 2009
An article in a recent edition of The Main Street Economist, the newsletter for the Federal Reserve Bank of Kansas City, discusses the current state of the farmland market and how we got to where we are.

The author, Jason Henderson, takes a look back to identify what factors were at play in the slowdown of the entire agricultural industry, as well as farmland prices.  He also speculates on when we may see a turn around for the overall economy and how that will benefit the farm economy.

To read the article, click here.

Have any thoughts on the article?  If so, I would love to hear them.  E-mail me at eric@loranda.com

Finally, I hope everyone has a safe and enjoyable Fourth of July weekend.

Source: Federal Reserve Bank of Kansas City

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