Skyrocketing farmland prices, particularly in states like Illinois, Iowa and Nebraska, giddy with the promise of corn-based ethanol, are stirring new optimism among established farmers. But for younger farmers, already rare in this graying profession, and for small farmers with dreams of expanding and grabbing a piece of the ethanol craze, the news is oddly grim. The higher prices feel out of reach.
[snip]In central Illinois, prime farmland is selling for about $5,000 an acre on average, up from just over $3,000 an acre five years ago, a study showed. In Nebraska, meanwhile, land values rose 17 percent in the first quarter of this year over the same time last year, the swiftest such gain in more than a quarter century, said Jason R. Henderson, an economist at the Federal Reserve Bank in Kansas City.
A federal-government analysis of farm real estate values released Friday showed record average-per-acre values across the country. The analysis said property prices averaged $2,160 an acre at the start of 2007, up 14 percent from a year earlier.
"For everyone who owns an acre of land, we love this," said Dale E. Aupperle, a professional farm manager and real estate consultant in Decatur, Ill., who said the rising land values were being driven by rising commodity prices (though corn has dropped some since June) and the prospect of increased demand for ethanol.
"For everyone who doesn't own an acre of land, these prices mean it gets a little harder to get into," Mr. Aupperle added. "For an entry-level land owner or a renter, there's a bit of a thought right now that the train is leaving and I'm not on it."
[snip]
Unknown is what will come of land prices if corn loses its place in the ethanol world and is surpassed by another source like cellulosic ethanol from switchgrass.
"Right now, a lot are still betting that corn-based ethanol will be around a while," said Mr. Duffy, who is also the director of the Beginning Farmer Center, which assists farmers who are starting out. He noted two other farming booms, in the 1910s and the 1970s, which were each later followed by periods of depression.
"In five years, corn-based ethanol will be around," Mr. Duffy said. "Fifteen years? I'm not as convinced."
5 comments:
You, of course, heard about the farmer who won $12.6 million in the lottery? When asked what he would do with the windfall, he replied, "Reckon, I'll just keep farming till it's all gone...."
The classic sinkhole for money...the private farmer.
I read, yesterday, that they're expecting a record corn crop this year.
I still haven't made up my mind on ethanol. I like it, in principle, but I'm afraid the push to market is going to cause some ridiculous behavior and odd problems. I suppose it gets people thinking about alternatives to petro, at least.
Been there and done that a few decades ago, and this should just about wipe out the family farm.
People will go into debt to expand their place and then the whole thing will come crashing down and agribusiness will move in again.
Look up Farm Aid. Reagan caused it the first time and Bush is at it again.
We don't need a replacement for oil we need a replacement for all of the engines that burn things to produce mechanical energy.
I've been keeping track of these cars:
http://rantsfromtherookery.blogspot.com/2007/06/and-politicians-expel-enough-hot-air-to.html
Post a Comment