Bull or Bear?Bull or Bear?

Samuel E. KainSamuel E. Kain

Accredited Land ConsultantAccredited Land Consultant

Regional Sales ManagerRegional Sales Manager

Farmers National CompanyFarmers National Company

Iowa Land Price ReviewIowa Land Price Review

$0

$500

$1,000

$1,500

$2,000

$2,500

1981 1982 1986 1997 2003

$2147

$787

$1837

$2275

Iowa State Land Survey

$1801

Grain Price ReviewGrain Price Review

$0.00$1.00$2.00$3.00$4.00$5.00$6.00$7.00$8.00$9.00

$10.00

1981 1982 1986 1997 2003

Corn

Soybeans$2.34 $2.69 $1.41 $2.59 $2.19

$5.94 $5.82 $4.73 $6.33 $6.08

USDA Average Price Received by Iowa Farmers

Grain Yield ReviewGrain Yield Review

-10

10

30

50

70

90

110

130

150

170

1981 1982 1986 1997 2003

Corn

Soybeans

USDA Average Iowa Yield

157 Bu127 Bu 125 Bu 135 Bu 138 Bu

40 Bu 36.5 Bu 41.5 BU 46 Bu 32 Bu

Crop Income / Land PriceCrop Income / Land Price

$0

$500

$1,000

$1,500

$2,000

$2,500

1981 1982 1986 1997 2003

$2147

$1801

$787

$1837

$2275

$530 $536$387

$649$538

Avg. Annual Prime / Inflation RateAvg. Annual Prime / Inflation Rate

0123456789

101112131415161718

1981 1982 1986 1997 2003

Prime RateInflation Rate

15.75%

14.58%

8.25%8.50%

4.25%

10.36%

6.16%

1.86%2.35%

1.43%

$0

$500

$1,000

$1,500

$2,000

$2,500

1981 1982 1986 1997 2003

0%

2%

4%

6%

8%

10%

12%

14%

16%

1981 1982 1986 1997 2003

Prime Rate

Inflation Rate

Land ValueCrop Income

$2147$1801

$787

$1837

$2275

$530$536 $387

$648 $538

15.75%14.58%

8.25%8.50%

4.25%

10.36%

6.16%

1.86% 2.35% 1.43%

TheThe inflation rate between January 1981inflation rate between January 1981and January 2004 was 112.87%and January 2004 was 112.87%

1981 Land Value x Inflation rate = 2003 Land Value1981 Land Value x Inflation rate = 2003 Land Value

$2147 x 112.87% = $2423$2147 x 112.87% = $2423

““Bull Factors”Bull Factors”

Strong Commodity PricesStrong Commodity PricesLow Interest RatesLow Interest RatesLow InflationLow InflationLimited SupplyLimited SupplyGovernment ProgramsGovernment ProgramsGeneticsGenetics Increased Economies of ScaleIncreased Economies of ScaleRevenue Insurance ProductsRevenue Insurance Products

Do you believe with:Do you believe with:

Limited amount of land for saleLimited amount of land for sale$3.00 per bushel corn$3.00 per bushel corn$10.00 per bushel beans$10.00 per bushel beansLow inflationLow inflationLow interest ratesLow interest rates

That land prices That land prices will go down?will go down?

Definitely a Bull!Definitely a Bull!