1. 2014 Outlook for Farmland Values & Cash Rent

2. 2013 Purdue Land Value Survey State-wide Land Quality Yield (Bu/a) Value per acre % Change 20122013 Top1937,7049,17719.1% Average1606,3597,44617.1% Poor1275,0135,75014.7%

3. 2013 Purdue Land Value Survey State-Wide Cash Rent Land Quality Yield (Bu/a) Cash rent per acre % Change 20122013 Top 19226529410.9% Average 15920822910.1% Poor 1261591749.4%

4. Value of Indiana Farm Real Estate, 1913- 2013, USDA

5. Percentage Change in Nominal Indiana Real Estate Values 1911-2013, USDA

6. Frequency of Change in Farmland Value No. of Obs. (20%) to (16%) (15%) to (11%) (10%) to (6%) (5%) to (0%) 0% to 5% 6% to 10% 11% to 15% 16% to 20% More than 20% Land Value102344142631965

7. Trend in Value of Indiana Farm Real Estate 1910 – 2013

8. Percent Deviation from Trend, Indiana Farm Real Estate Values, 1910 - 2012

9. Indiana Cash Rent, 1967- 2013, USDA

10. %Change in Real Estate Value + Cash rent / Value, 1967 – 2013, USDA

11. Farmland Drivers

12. Long-term Interest Rates

13. Estimated Returns August 13, 2013 2013201420152016 CornSoybeansCornSoybeansCornSoybeansCornSoybeans Yield 16354164551655516656 Price$4.86$12.23$4.70$11.60$4.57$11.08$4.49$10.71 Gross Revenue$792$660$771$638$754$609$745$600 Production cost$454$247$444$259$466$272$489$286 Contribution margin$338$413$327$379$288$337$256$314 Machinery & labor overhead $129 $132 $139 $146 Return to land & risk$209$284$195$247$149$198$110$168 Cash rent$233 Economic profit-$24$51-$38$14-$84-$35-$123-$65 Rotation economic profit$14($12)($60)($94)

14. 2014 Cash rents will be pretty much unchanged – Tenants will be cautious because of tightened margins – Landowners will be happy with a rent that is more than they ever thought they would get Tight margins and tight cash flows will dampen farmers farmland buying – Land values will slow their increase – But we could find ourselves in an a 2009 like event and see downward adjust in farmland

15. The Future Not To Long From Now 2014 was the first of a series of good crop years Corn and soybean demand grows but slowly The investments in production capacity made around the world provide even more corn and soybeans Long-term interest rates rise but stay in a 4% - 6% range After dipping below $4.00, corn prices settle in at a new plateau around $4.50 and beans at $10.70. The return to land is $196 per acre. After a period of adjustment the return to land grows at close to 2%

16. Future After a turbulent period of adjustment, farmland values have – Stabilized at $6,500 (a decline of 15%) and resumed their steady upward rise because we need to feed 9 billion people and everyone knows they aren’t making any more of it.

17. Questions, Comments