An ag business consultant says, for some farmers, this might be a good time to expand by buying additional land.
“Sure there’s a lot of uncertainty out there,” Dennis Roddy with the consulting and CPA firm K-Coe Isom wrote in a recent blog. “But in times like this you need to make sure your eyes are wide open and you’re not missing an opportunity.
“Land values are down a little bit, or flat in most areas. There could be some bargains out there,” he says. “There’s potentially a lot of land possibly looking to change hands as some people might be exiting the farming business—or landlords are looking to do something else as they’ve maybe seen a lower rate of return.”
Roddy says farmers planning to finance a land purchase will need to show a strong balance sheet, solid cash flow and good working capital.
“Right now interest rates are low and most banks will allow you to use other land as collateral for a land purchase, so that’s good,” he wrote. “This could be a really good opportunity for our clients to expand their holdings if the numbers tell a good story.”
Roddy works out of K-Coe Isom’s Salina, Kan., office.
Source: brownfieldagnews.com