Does it Feel Like the 1970s?


Table of Contents:

  • The record soybean price prior to 2008 was $12.90, which was set in 1973
  • USDA has projected net farm income in the U.S. for 2010 at $81.6 billion


During the past few years, many have been drawn many to make comparisons with the agricultural economy that existed in the late 1970s, with record grain prices, high farm profits and rapid increases in land values. Here are some things to consider:

  • Soybean futures on the Chicago Board of Trade (CBOT) have been trading above $13/bu. recently. The record price prior to 2008 was $12.90, which was set in 1973.
  • July corn futures have been very close to $6/bu. in recent weeks, which surpasses the previous record price, prior to 2008, which was set in 1996.
  • USDA has projected net farm income in the U.S. for 2010 at $81.6 billion, which is up $19.4 billion from 2009. All of the top five U.S. farm earnings years have occurred in the past decade, topping $80 billion in both 2008 and 2010.
  • Overall U.S. farm debt-to-asset ratio is now estimated at about 10-11%, which is the lowest in decades, and the total farm-based equity (net worth) in the U.S. is now estimated at over $1.86 trillion – the highest ever.
  • Exports of farm products to China and other countries continues to be very strong, reaching $113 billion in 2010. The strong export demand is being driven by the lower value of the U.S. dollar and rapidly increasing middle-class population in many developing countries around the world.
  • Land values in Iowa were up 16% at the end of 2010, compared to a year earlier, and have increased 93% since 2004, which is comparable to land value percentage increases from 1973 to 1976.
  • Land rents for cash rental contracts in most areas of the Midwest are expected to be up 10-15% for 2010, as compared to a year earlier, and will have increased 30-50% in the last three or four years in many areas.
  • Everyone is bullish on the future of profitability in production agriculture. It is hard to find anyone talking about a potential downturn in the agriculture economy anytime soon.


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