By Jo Winterbottom and PJ Huffstutter
(Reuters) - in the US Midwest, falling grain prices after almost four years below underlines its commitment to the owners of rental income from tenants support are concerned about the rent to pay, because their incomes are squeezed.
Some grain producers are already seeing the overload. Take an extreme measure that is widely used since the 1980s to see: the violation of the rental agreement, the amount of land planted in spring and risking long-standing dispute with the owners reduced.
The voltages and other signs of agricultural boom that American agriculture grain has been known for over a decade. On Friday, sliced John Deere Tractor Manufacturers its profit forecast, citing lower selling prices by farm incomes and lower grain caused.
Many rental payments - from a few thousand dollars for a small farm million from a major operation - March 1, because, just weeks after the US Department of Agriculture (USDA) estimates, net operating income, it peaked at $ 129.000.000.000 in 2013 could fall by a third this year to 74 million.
Costs of inputs such as fertilizers and seeds, remains stubbornly high, strong exports in dollar prices of acidification and grains should remain below.
How many people are of the leases that they had committed, not known on foot. In Iowa, corn and soybeans the largest producer in the nation, an expert in real estate, said that the nearly 100,000 leases of agricultural land in the state, 1,000 or more could be hurt by this spring.
The stakes are high because areas of agricultural land is rented: From 2012 in most counties in the corn belt of the Midwest and Plains __gVirt_NP_NN_NNPS <__ grains, at least 40 percent of the agricultural land is rented or show praised USDA data.
"It's hard to know where the bottom is," said David Miller, director of research services and products Iowa Farm Bureau.
Signs of problems
However, the grain production is not very likely still significantly affected owners have rather someone who works his land, even at reduced prices, so broke.
But the continuing weakness of the agricultural economy could continue to spread: the consolidation of farms ", there would be fewer dealers, less elevators, etc., through the rural economy," said Craig Dobbins, Professor Agricultural Economics, Purdue University.
Perhaps less new farmers.
Jon Sparks operates approximately 1,400 acres of land and family leased land in Indiana. His nephew wants to work on the farm, but the margins are narrow and lease payments. Sparks can not do it to operate efficiently.
"We can not grow without" Sparks says. "I do not know what to do."
The owners are hesitant to cut rents. Some are retired, some of which rental income from the land to want to keep the income once, then the growing number of real estate investors. The owners have also seen tenants to spend on new equipment and buildings in the boom and feel tenant should still be able to pay the lease.
"As the holiday pay collections begin this spring, hope more farmers who have difficulty in acquiring sufficient financing lease or leave or attempt to have had the conditions to renegotiate," said Jim Farrell, President of the National Farmers Co, which is about 4900 managed operations in 24 States for the landowners.
Take a 80-acre (32 hectare) farm in Madison County, Iowa, belong to a customer of the peoples of the company, the manager of farmland. The farmer who last year leases the land for $ 375 per morning offered $ 315 for this year, said Steve Bruere, company president. The owner refused and hired a neighbor for $ 325 - more of a juicy bonus if the gross income of $ 750 head.
There are a growing number of other examples. Miller, Office Farm in Iowa, he told of a farmer near Marshalltown in central Iowa, the 650 hectares (263 acres) marched country because this culture, which could not pay the rent had learned. A few days later, he was told, a farmer in north central Iowa has violated its lease of 6,500 hectares.
COURT OR LOAN
Affected broken lease some homeowners consider legal options when Roger A. McEowen, director of the Center of Iowa State University for Agricultural Law and Tax Law. His staff began to answer phone calls from nervous owners last autumn.
One problem is that many homeowners have never thought a lien on the set of their tenants for documents. This means that the owners "can not take something out of the property if the tenant does not pay," McEowen said. "This also means that they will be behind the bench."
However, the farmers can fight to get away from their leases, Kelvin Leibold said, a specialist in the management of the farm in Iowa State University Extension.
"People want their money. They want to get paid. I think we will see some cases to go to court over this," he added.
To avoid such a scenario, farmers began on the banks apply for loans to fund operations and to help ensure liquidity. Operating loans to farmers by 37 percent in the fourth quarter of 2014. More than a year to 54 billion US dollars, according to estimates based on a survey of Agricultural Finance Databook last of the Federal Reserve Bank of Kansas City.
Loans for any purpose - that could be used to lease after the Bank Senior Vice President Nathan Kauffman, - almost in the fourth quarter 2014 as against the previous year doubled to 25 billion.
The total volume of loans to non-agricultural land increased by $ 112 billion over 50 percent in the quarter.
"It's working capital and bankers are highlighted in working capital," said Sam Miller, General Manager of the Agricultural Bank of BMO Harris Bank. "Liquidity has increased in the last year."
(Tomasz Janowski average Spanish)
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