World Agriculture Investment Conference October 4-5, 2011
Cash flows will have differences. Farmland will also be more sensitive to commodity prices because lease rates are reset every year. Farmland will also be affected by farm margins, so input costs are more important. This would be the equivalence of maintenance on a building. Farmland has higher risks in the short-run because weather will have a significant effect on the ability to pay leases. Prices can rise but if the quantity is reduced on your specific farmland, the value for income production is lower.