The Fort Wayne Farm Show concluded on Thursday with large crowds and a very long list of exhibitors. A testament to the strength in the ag economy, the three day show drew record crowds despite challenging weather. Every booth space was filled, with over 150 exhibitors on the waiting list according to show officials. Vendors reported brisk sales with some equipment dealers saying they were sold out of some big ticket items. Bruce Everhart, with Wells Fargo Bank, said strong commodity prices and low interest rates make this a good time to buy. But he warned about buying too much, “It is important that farmers be cautious about the amount of new equipment or land they buy.” He told Hoosier Ag Today keeping one’s balance sheet heavily leveraged will become a problem when commodity prices go down.
Not only is the farm equipment market hot, the market for farmland is also very strong. One plot of land in Benton County, IN, recently sold for $10,000 an acre. Dr. Chris Hurt told a farm show audience earlier in the week that paying those kind of prices for farmland can make financial sense, but Everhart warned about paying too high a price to expand, “It depends on your appetite for risk; and that appetite should be measured by the strength of your financial statement and your ability to budget a profit in the future.” He said he is concerned about current high land prices, “I have seen them go way, way up; and I have seen them come way way down.” He is concerned that producers will over commit themselves during this bull market.
Most farmers are feeling pretty good about the future of the ag economy; and Everhart agrees, saying the next few years look good. But he urges his customers to take advantage of these good times to prepare for the bad times, “It is a good time to build your working capital and build your net worth.” He says expansion of a farming operation should be based on sound judgment not emotion.