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It's really too bad. IF.
Land Costs Hamper US Competitiveness
"In the U.S., as profits increase, so do land costs for American farmers," explained Yelto Zimmer, a senior crop economist at the Thuenen Institute of Farm Economics in Germany. He coordinates the global agri benchmark crop network which tracks economics of typical farms in 40 countries.
"The U.S. has huge room to maneuver [by lowering land costs]," Zimmer said. "The U.S.'s low direct and operating costs give it a significant advantage over both typical farms in Mato Grosso (Brazil) and in Eastern Europe.
"The biggest challenge to U.S. farmers will be how fast and how far rents will fall with lower farm gate prices," Zimmer said.
High land rents account for about half of U.S. soybean costs, almost equal to direct, operating and other costs combined. For corn, land was more than a third of the total cost of production in the U.S, according to the data presented by Kelvin Leibold, a farm management specialist with Iowa State University Extension and Outreach.
Partly offsetting that disadvantage is that U.S. and Ukraine have a tremendous competitive advantage in transporting grain to export markets. To transport corn from a typical farm in Iowa to the nearest port ($38/ton) or in the Ukraine to the nearest port ($12/ton), is much cheaper than in Brazil's Mato Grosso region ($120 /ton) or in Argentina ($60/ton) from farm to port.
Bottom line: U.S. corn and soybean farmers are extremely competitive in the world market, if you don't include land costs.
You know dude, whatever our differences on other issues, I really enjoy your posting on topics like this. You really bring it, and are an excellent contributor. Very informative.
