By  E. W. Lang

Iowa farmland prices at public auction this week poked through an average price of $200 per tillable CSR2.  CSR2 is Corn Suitability Rating 2 that is indicative of corn producing ability, rainfall for the area and the ability of the soil to perform with that amount of rainfall.  It's all new since I was in university, and I'm not sure I made it to very many agronomy lectures, anyway.

Iowa land prices in December averaged $157 per tillable, and a year earlier they were $110 per tillable CSR2.  A significant number of dairies are refinancing, or have refinanced, against land values in the last couple years.  While land may gain another 25% in value this year, many of these dairies are operating on a 30-year-old model for both scale and lbs. of milk per person.  If your lender is willing to loan you more money, but doesn't really want to, maybe go home and spend some time in silent contemplation.  Then come back with a sound decision, not a decision based on what you are afraid others will think of you for scheduling a dispersal. 

I realize this has been a reoccurring theme from me on OCaM, but the farmland value crash and high interest rates of the 1980s took out a lot of farms and several lives - farmers, their family and sometimes their lender - by gunfire.   More than a couple auctioneers of the era had a deputy sheriff in the auction block with him for one reason or another.   History always repeats to some degree. 

Block cheese gained five cents at $2.37 per lb.  Barrels were up nine cents this week at $2.44 per lb., nine cents off the all-time high.  Butter lost three cents at $2.75 per lb.  Class III Milk Futures for April, May and June average $25.03 per cwt., dang near 50 cents higher than a week ago.  Class IV for those months averages $25.10 and is down 13 cents over the four days of trade this week.

Class III Milk Feed Indices are in the mid $11 range for the next couple months.  Thats about 50 cents more than a week ago.  And $11 won't do it on a lot of dairies when all labour and depreciation are included on the Net Income Statement.  Corn gained 21 cents per bushel this week and soybean meal lost $7 per ton.

Conventional wisdom is that the labour situation has begun to tick toward normal.  The five or so different places where I regularly get cookies, donuts, milk, coffee and sometimes gas seem less desperate to acquire warm bodies.  There is some job-hopping remorse around the country.  Folks who quit here and started there found out the grass was indeed not greener on the other side, and higher pay often includes a less pleasant company culture.   

Also, a couple months ago it seemed that every newly employed person was King or First Lady of the workplace while the court was their supervisor, employer and the entire human resources department.  This dynamic is shifting in that a few troublesome Prima Donns and Prima Donna are now being terminated, such that they might become examples unto the others be who feel they can't be replaced.