1. Sterling, Colorado March 1, 2016 R. Brent Young, Ph.D. Agriculture and Business Management Specialist

2. Agriculture & Business Management  First Golden Age ◦ 1910-1914  Average gross farm income doubled  Average farm land values tripled  Second Golden Age ◦ 2007-2014  High prices for grains relative to production costs  Farmland values increased 138% from 2004 to 2014

3. Agriculture & Business Management  How long does it take prices to recover? ◦ Paul Peterson, University of Illinois looked at corn prices from 1886 to 1947 and 1948 to 2014  Compared season average price for each year with the season average price for the next year  If following years price is lower, called that a year to year decline and looked for the next year that prices were higher than first year

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8.  When will prices recover? ◦ In one half of the downturns prices recovered in 5 years  50:50 chance of recovery to the 2012 level ($6.89) by 2017 and to 2013 ($4.46) by 2018  50:50 chance for longer than 5 year recovery  1860’s 50 years  1950’s 14 to 22 years  1990’s 9 to 12 years

9. Agriculture & Business Management  Word War I  World War II  Creation of an ethanol industry  Global crop failure These game-changing events are few and far between, and their timing is completely unpredictable.

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12. Does not include land costs

13. Agriculture & Business Management Does not include land costs

14. Agriculture & Business Management Does not include land costs

15. Agriculture & Business Management

17. R. Brent Young, Ph.D. Agriculture & Business Management Specialist Ph. 970.522.7207 brent.young@colostate.edu