Farmland Barometer - January 2012

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Heartland Outlook

Agriculture is experiencing incredible forces from every angle - - and they are global as well. At Heartland Ag Group Ltd., we are optimistic about our future and are watching the following key areas:

Commodity Prices
Let’s use $5.50 corn and $11.50 soybeans as a focal point for our future income projections.

Bushels Per Acre
Farmers will produce positive yield increases as weather conditions return to normal cycles.

Interest Rates
The historically low farm mortgage rates are attractive - - but be careful of rising rates in our future.

National Politics
2011 is a presidential election year - - be careful. Deficit spending and our Federal Reserve monetary policy will be very inflationary long term.

World Population
Don’t forget there will be 9 billion people to feed by year 2050 - - hungry customers for our farmers.

United States Economy
This big guy can either help us out or take us down. Our national lack of financial discipline is alarming - - and threatening.

Sovereign Debt Crisis
Apparently on the planet is spending more than they take in - - a huge problem brewing.

U.S. Tax Policy
There will be a giant sucking sound form Washington D.C. as politicians search for money to fill deficits. Income, capital gains, and estate taxes will become burdensome.

Farmland is a wonderful hedge against inflation and our rapid rise is signaling more inflation coming. China has raised interest rates five times this year to offset inflation.

Net Farm Income
We see a solid future for net profits from farmland that will drive farmland values upward into our extended future.

Investor Demand
Agriculture is enjoying the movement of money from soft assets (financial investments) to hard asset (farm real estate).