Late summer brings along thoughts on possible lease changes for next year. As always, the factors needed to evaluate a change are a moving target. A brief review of these factors is in order as we approach the mid portion of the growing season.
The past few months have been quiet for land sales activity in most areas, but there has been some activity when we consider the entire region. Overall, we’ve tracked results of fewer than twenty public auctions from early April to late June. It is normal for activity to begin increasing as we move into mid-summer and continue to increase each month into early December. There has been more land offered for sale by listing by brokers, which is consistent with the past several years. Since the land market cooled off in 2014, some sellers prefer the listing method although most non-family transactions continue to utilize the auction method. Both are effective methods if expectations are appropriate.
Recent grain price movement, finally to the upside just when all indicators pointed otherwise, gives us reason to consider the markets from the longer-term perspective. One of the more valuable quotes of all time may be “those who cannot remember the past are condemned to repeat it.” So let’s take a look at corn and soybean price history. First corn… USDA was founded in 1863 and began publishing the average price of corn in 1866. While the accuracy of those numbers may be debatable from a local perspective, it does provide a standardized look at historical markets. What we found was a 150-year history of repeating cycles, generally about 33 years in length.
Record rainfall last December filled the soil profile setting the stage for saturated conditions this spring. Warm weather and surprisingly good soil conditions in mid-April encouraged farmers to start planting early, but cool and wet weather followed in late-April and May. The planting season turned into a long struggle for many farmers, especially in Northwest Iowa. We were fortunate to get a few small windows of warm, dry weather in May, during which most of the corn and soybeans were able to be planted. The wet spots were planted or replanted in late-May and early June
The Iowa lease law requires notification from either party, which could be the landowner or farm tenant, in writing prior to September 1 if changes are to be made to your current lease for the upcoming 2017 lease year which is March 1, 2017 to February 28, 2018. You do not have to have a new lease in place prior to September 1, just notification by either party if they want to change lease terms.