Friday, August 10, 2007

With all that said, I find this New York Times article to be an even greater threat to the future of American agriculture:

Ethanol is feeding hot market for farmland

While much of the nation worries about a slumping real estate market, people in Midwestern farm country are experiencing exactly the opposite. Take, for instance, the farm here - nearly 80 acres of corn and soybeans off a gravel road in a universe of corn and soybeans - that sold for $10,000 an acre at auction this spring, a price that astonished even the auctioneer.

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% 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.

Now, don't get me wrong. I think that the number of young people engaged in farming is the challenge. While this article lays the blame on hands of ethanol mandates, I see the problem much bigger and more complex. Investors were seeking farmland ownership long before the ethanol rage, causing land values to increase beyond what farming could return. Here is one such example from my home state of Nebraska.

Turner's land holdings keep increasing
The 100-year tenure of the McMurtrey Family at a pioneer ranch in Cherry County ended June 26 with a public referee auction at Valentine.

The real issue is the mindset of our young people believing there is no opportunity for them. I stated on Rural Route this week that the opportunities are greater than ever for young people who WANT to farm. The average age of the U.S. farmer, combined with their kids leaving the farm, creates the opportunity for sweat equity positions and purchase after a number of years working in the said operation.

I have not asked for permission to reprint so I will withhold the author's name, but here is one response I received as a result of that comment. I strongly disagree with his sentiments. What is your opinion?

Once again Trent has completely missed the mark. I have heard him espouse this before. He thinks there are legions of aging farmers who are looking for a young person to take over their farm. The fact is 99% of these farmers are only interested in selling their farm to the highest bidder and even if they want someone in particular to take over their place, it is at full market value plus a little more if they can get it.The only real issue they have is how to beat the IRS out of the tax bill. If they could figure this out, they would quit in droves. I am sure every older farmer you approach would be happy to hear that you are willing to take over the labor aspects of their farm, but when you get to the part that we then are going to split up the profits and you are going to let me buy you out at a reasonable price and reasonable terms, the deal is off. Greed is rampant is every aspect of our society and farmers are no different.

As to the question of who will take these operations over. We have seen in the past that existing operators just get larger and I believe this trend will continue and accelerate.

Trent needs to take off the rose-colored glasses.

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