Owning land paying off for U.S. farmers

Jim Suber

By A Contributor

We used to hear it a lot, “We’re land rich and cash poor.”

Today we hear that the land is far more valuable than ever, and most of the folks buying what little is now coming onto the market are farmers. People who own land are now said to be hanging onto it a little tighter than just three years ago.

Digging a little deeper, we find that a large amount of farmland is expected to be redistributed within the next five to 10 years as many farmers of today will be retiring in that time slot. Indeed, the first year of the baby boomers, those born in 1946, are now 65 or 66 years old.

As ownership of much of that ground becomes an issue to heirs and others, some of it will be sold to meet certain demands and perceived needs.

But right now not much is changing hands and that’s because, say the experts, the dividends or returns from owning farm ground and renting it out are far more rewarding than most other forms of investment. Interest rates that pay investors are near zilch, and the stock market is too volatile and too risky for many people.

Will the land boom go bust, as it did back in the early 1980s? Most likely not, experts contend, because that down draft was fueled by farm indebtedness. Today’s farmers are in much better financial condition that they were then in terms of lack of debt.

About the only things that can blunt farm ground’s rise in price in the picture are lower commodities prices. And lower prices are predicted by marketing analysts for about everything but wheat, which should stay in the $6 to $6.50 per bushel range for much of this year. The new cattle on feed report also suggests that fed cattle prices should be headed upward, as fewer and fewer lighter cattle head for the feedlots.

Just for the sake of perspective and idle wonderment, the USDA says that the nation’s farmers have about 254 million acres to be planted with the top eight crops this year.

Presumably, those would include about 94 million in corn and 55 million in all wheat classes. Then there are soybeans, other grains, cotton, and several more candidates.

To put that acreage into more perspective, the State of Kansas covers 81,815 square miles. There are 640 acres to a square mile. If my arithmetic is correct, there are 52,361,600 acres in Kansas. So, a land mass about 5 times larger than Kansas would be the equivalent of acres in crops in the United States, not counting Detroit’s truck gardens.

Grass and forage are big deals when it comes to acreage, as well. In Kansas, for example, about 20 million acres are used for row crops and wheat, the latter taking up nearly 10 million historically. Another 20 million are in various grass and hay covers, including some alfalfa. Add on streams and some woods, mostly along those waterways. Then there are towns and highways, which obviously take up significant acreage.









Terms of Service | Privacy Policy | The Manhattan Mercury, 318 North 5th Street, Manhattan, Kansas, 66502 | Copyright 2016