Agriculture industry for the past 6-7 years has been the most prosperous in history. The trend today is toward land auctions to maximize the sale. Today good farm land is worth $12,000 per acre. $2.00 corn is history; today’s average is over $6.00. (Both are a three- fold increase.) He expects prices to begin coming back down.

Central Indiana is now the ‘garden spot of the world’ for crop production; we have the best crop yields in the nation.

Expect record corn crops this year of up to 260 Bu per acre due to the most favorable July weather. He expects prices to end at about $4.50 per bu.

Banks are better positioned today to weather the down turn because they responded reasonably to the 1980’s crises by capping the collateral value of farm ground at $6000 per acre. Detraction needs to occur to stabilize prices over the long term, and banks are positioned to absorb that. Yields will make up for the unit price drops.

The impact of today’s hot dry weather is minimal for corn yield, but there may be some quality issues. For beans, there could be over a 10% reduction from yields expected earlier this year.

Cash rental today, for the best ground are around, is as high as $510 per acre; down to about $250 for poor ground. Locally, the average is about $430 per acre. Seven years ago, the average was $200. The 2013 cost to produce a crop is about $510 per acre, plus the max $530 to cash rent the ground, or a total of about $1040 per acre. That land should make about $1340 per acre for a profit of about $300. The goal is a minimum of $100 per acre, so farmers are doing well.

Urban sprawl of the best farm ground could very well be a serious issue in years to come. There are some models for how to preserve that land for farming by selling development rights to the government somewhat like mineral rights. There is also the possibility of ‘reclaiming’ farm ground in the future.