Farmers consider buying land as incomes soar
Some crop farmers might be looking to acquire more land as net farm incomes soar to heights not seen in almost a decade.
But Kent Thiesse, an ag lender with MinnStar Bank in southern Minnesota, waves a caution flag at that notion.
“To me, the first priority should be to make sure if your working capital got depleted over the last three or four years before 2020, is to make sure you get your working capital back to a good manageable level. Work with your ag lender.”
Randy Dickhut with Farmers National Company says farm real estate sales the past two months are up nearly 50 percent compared to October and November of last year.
And with reports of cropland prices heading back toward the highs of 2012, Thiesse tells Brownfield farm machinery and capital improvements might need to take precedent.
“There were a lot of farmers back in the 2011, ’12, and ’13 era that went out and bought some higher-priced land (using) some cash. And then along came 2014, ’15, and ’16 and they couldn’t afford the payments on the land.
Thiesse says farmers can’t use 2020 as a barometer of where profit levels will be going forward.