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n. Illinois | Excellent topic.
The issue is in my mind is do you keep all of your eggs in one basket?
IE all my assets are tied to the results from corn/soybeans for those located in the corn belt.
Or do you diversify into other assets totally unrelated to AG?
IE Mutual funds that have over a 20 year period avg over 10% return even with the large declines experienced in 2020 and 2008.
Or other types of Real Estate investments like local residential rentals or commercial properties.
Cash return to farm ground in my area where land values for class A ground is $16,000/ac is roughly $300/ac on a 50-50 corn SB rotation which is a return of less than 2% and land values for the year are down 7% from the value in 2023. Hard to convince me that is where you should bury some capital.
This doesn't mean you pass up on that piece that completes your puzzle IE the farm next door that you have wished for forever and that will never be available again. I might be tempted to let go of a lessor quality piece that doesn't complete the puzzle to help pay for it. | |
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Sand 85. Great post and worthy of discussion
