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In US Midwest, young farmers priced out of land
Ethanol demand has pushed Midwest farmland prices through the roof.
By Amanda Paulson | Staff writer of The Christian Science Monitorfrom the March 22, 2007 edition
Page 1 of 3
DES MOINES, IOWA - Matt Miller dreams of the farm he and his wife and young son could one day live on.
Mr. Miller says he could make it work with 200 acres near the small farm his father owns if he focuses on organic agriculture and diversifies with a few dairy cows or hogs. The problem: buying the land.
He already rents 90 of those acres, and he and his wife have been saving her income for years to buy the rest. But every time they reach their goal, land prices go up.
Real estate prices in cities may be falling, but in Midwestern farm country, land values are going through the roof. Fueled by heavy ethanol demand, which has pushed up corn prices, land that sold for $4,500 an acre a year ago might go for about $6,000 an acre today.
"It's kind of disheartening," says Mr. Miller, an organic inspector for the state of Iowa. who has a friendly smile and an upbeat attitude. "It's like a moving target. All these things we've done are futile."
Average land values are up 13 percent in Iowa from a year ago and 14 percent in Nebraska – and far more than that in prime counties. Along with surging corn prices, land-value growth means a boom in wealth for farmers who own their land. But for beginners like Miller, it's made an already tough proposition far tougher.
"It's absolutely destroying their chances," says Mike Duffy, an agricultural economist at Iowa State University and director of the Beginning Farmer Center. When Mr. Duffy advises aspiring young farmers, he says he encourages them to find other ways to begin than buying land. "But they always want to own land," Duffy says. "That's somehow the badge of being a farmer."
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