All agricultural production begins with the soil! The Midwest region contains some of the best soils in the world. Combined with some of the most favorable weather patterns, the cornbelt produces record yields and a majority of which is non-irrigated. That is the reason why so many investors are looking for Midwest farmland. The cornbelt continues to lead in growing the grain needed for both human and livestock uses, plus ethanol production and exporting to the rest of the world.
This high productivity of the soils, and outstanding farmers continuing to produce record yields, has caused overproduction over the past few years. This has in turn caused a cycle of lower prices and challenging net farm incomes. However, as in the past, successful farming operations are ‘weathering’ the cycle and remaining profitable.
These cycles have also created major changes in lease rates for absentee landlords over the past decade. From a doubling of lease rates from ‘09 to ‘13, then stabilizing or reduction of lease rates from ‘13 to the present. If you are a landowner with questions regarding the correct lease rate on your farmland, MRI can help! With experience across the entire Midwest, MRI understands the productivity of various soils, can calculate the income potential and determine the appropriate lease rate that is favorable to both the landowner and farm operator. Feel free to call us!