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posted on Feb 15, 2012

Recently I spoke to the Arkansas Seed Growers Association and the Arkansas Rice Growers Association about the advantages and disadvantages of on-farm grain bins.  As an economist, my answer to the question “Are grain bins profitable?” is it depends.  If a whole farm is managed efficiently, grain bins can be very profitable.

posted on Feb 2, 2012

Recently, I attended the Arkansas Soil and Water Education Conference held at Arkansas State University.  The conference had a range of speakers from state government to private companies.  In the Mississippi Delta Region, producing rice on average takes twice the water as corn, soybeans, or cotton.  The the amount of water needed can be reduced with land grading by as much as 40% comparing contour levee rice to zero grade rice.  Other water and energy savings can come from the use of poly pipe, irrigation scheduling, and correct holes sizes in irrigation poly pipe.&nbsp

posted on Jan 27, 2012

When visiting with someone about selling, I generally ask “What will you do with the proceeds and have you visited with a CPA about tax consequences?”  Tax implications can be very significant when selling real estate.  Traditionally, most sellers receive proceeds by cashing out, a 1031 exchange, or owner financing.  I recently read about another option called a deferred sales trust.

posted on Jan 17, 2012

On Saturday, January 14, 2012 Glaub Farm Management auctioned 465.5 +/- acres in Clay County, AR.  The auction attracted 23 bidders from six states.  Tract 1 sold at $3,760/ac and Tract 2 sold at $4,200/ac averaging $3,968/ac across both.  Tract 2 sold for a premium compared to Tract 1 due to being a cotton farm, free and clear of any lease in 2012, and better drained than Tract 1.  In addition Tract 2 fit the buyer’s need as an addition to land already owned in the area.  Below is a summary of the two tracts.

posted on Jan 3, 2012

If you read agricultural newsletters or magazines your may have seen some of the $10,000/acre plus land sales in the Midwest.  Reports indicate some areas of the Midwest have seen greater than a 20% increase in land prices.  The Mississippi Delta Region has seen increases in land prices over the past year but not as dramatic as the Midwest.  I’ve seen several sales over $4,000/ac and a few above $5,000/ac in the Mississippi Delta Region.  So you may ask what is currently driving land prices higher and who is buying in the Mississippi Delta Region?

posted on Dec 20, 2011

The UA Cooperative Extension Service recently released their 2012 crop budgets.  These crop budgets provide a useful tool for operators and landowners in planning and analyzing equitable lease arrangements.  The UA also releases the budgets in Excel files that allow a user to change parameters for customization.

posted on Nov 28, 2011

With the fiscal issues of our federal government every farm program will be scrutinized and many may be eliminated.  The direct payment program has a large target on its’ back.  The origins of the direct payment come from the Federal Agriculture Improvement and Reform Act of 1996.  Direct payments were intended to be a transitional payment away from government support but have continued under the previous two farm bills.

posted on Nov 16, 2011

Agency is an issue in the farmland real estate business.  There are folks out there who try to make you feel that they are on your side in a transaction but are they really?  Sometimes I feel buyers and sellers do not fully understand agency.  Agency to me is best explained with the use of a fence that divides buyer and seller.  What side of the fence is the real estate agent standing on?  A real estate agent in most states can work for the buyer, seller, or sometimes both.  When representing both, the agent is standing on top of the fence with very little room

posted on Nov 7, 2011

On Saturday, we auctioned 316.6 +/- acres in Randolph County, AR.  The farm included three irrigation wells, two 5,500 bushel grain bins, a T&L Pivot, and approximately 93 acres of precision leveled ground.

The farm sold for $3,050/acre.  In my opinion this was a solid selling price due to the farm’s condition and this year’s spring flood issues/levee damage.  The farm has many challenges, but it is well suited to become an excellent farm with some additional improvements.

 

posted on Nov 2, 2011

Last week Jeffrey Hignight and I were in Phoenix, AZ for the 82nd annual meeting of the American Society of Farm Managers and Rural Appraisers (ASFMRA) which coincided with Agronomics Vision 2012.  This conference provided an opportunity for investors to meet rural land professionals of ASFMRA.  The following are my thoughts from the meeting.

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