1. Bull or Bear? Samuel E. Kain Accredited Land Consultant
Regional Sales Manager
Farmers National Company

2. Iowa Land Price Review $2275 $2147 $1837 $1801 $787
1981 High land value for Iowa
1982 Beginning of Farm Crisis
1986 Low Land Value for Iowa
1997 End of 11 consecutive years of increasing land values
2003 Last full year Land values
Iowa State Land Survey

3. USDA Average Price Received by Iowa Farmers
Grain Price Review
$5.94
$5.82
$4.73
$6.33
$6.08
$2.34
$2.69
$1.41
$2.59
$2.19
Average corn first 3 months 2004 price $2.56
Average bean price first 3 months 2004 $8.53
USDA Average Price Received by Iowa Farmers

4. Grain Yield Review 127 Bu 125 Bu 135 Bu 138 Bu 157 Bu 40 Bu 36.5 Bu
USDA Average Iowa Yield

5. Crop Income / Land Price
$2275
$2147
$1837
$1801
$787
$649
$530
$536
$538
$387

6. Avg. Annual Prime / Inflation Rate
15.75%
14.58%
10.36%
8.50%
8.25%
6.16%
4.25%
2.35%
1.86%
1.43%

7. Land Value Crop Income $2275 $2147 $1801 $1837 $787 $530 $648 $538
$536
$387
15.75%
14.58%
10.36%
8.50%
8.25%
6.16%
4.25%
2.35%
1.86%
1.43%

8. The inflation rate between January 1981 and January 2004 was 112.87%

9. 1981 Land Value x Inflation rate = 2003 Land Value $2147 x 112

10. “Bull Factors” Strong Commodity Prices Low Interest Rates
Low Inflation
Limited Supply
Government Programs
Genetics
Increased Economies of Scale
Revenue Insurance Products
Even with a 140 bushel average yield U.S corn stocks for would drop to a very tight level.
U.S. Soybean levels are at lowest level since 1989 and Plant disease problems in Argentina and Brazil could make it worse.
Increase usage of Ethanol and Bio-diesel. Ethanol from American corn growers reduces our demand for imported oil by nearly 100,000 barrels a day. Ethanol production in 2004 expected to be about 3.3 billion. Industry plans to double production in next 10 years.
March Prime rate 4%
Low but stable inflation is good for long term economy. It allows producers to know their costs.
Average inflation rate for 1st 3 months of 2004 at 1.79%
Average farm will change hands about once every 20 years. 1.5% to 2% sold in arms length transaction. In Iowa that would translate to about 465 to 620 thousand acres.
In 2004 are real estate transactions are running about 50/50.
Approximately 1.8 million acres in CRP in Iowa. 34 million nationally.
Bigger more aggressive producers compete first with higher cash rents. Higher rent in turn turns into higher land prices.
Since 1950 land rent after taxes has averaged about 5.8% of land value.

11. Do you believe with: Limited amount of land for sale
$3.00 per bushel corn
$10.00 per bushel beans
Low inflation
Low interest rates

12. That land prices will go down?

13. Definitely a Bull!