One thing they are not making any more of--land.
Well, maybe in Hawaii.....
[flash width=420 height=315] http://www.youtube.com/v/-IaRjTt_-P8?version=3&hl=en_US [/flash]
Wow, I bought 25 acres for $16 K in my town. Course even goats don't like it because it's too steep.
Just as much farm land now if not more than there was 20 years ago. That graph is misleading, it is showing the demand on limited resources that increasing population is causing. Need to cut population. Do we have the foresight to do that, or will we need to depend on nature using war, starvation and disease to get the job done?
jud
That is absolutely insane. Too many dollars, not enough sense. When you add in all the costs associated with producing something on those acres, plus taxes and insurance and such it will take extraordinary production rates and commodity prices for a very long time to justify that steep of an investment.
>When you add in all the costs associated with producing something on those acres, plus taxes and insurance and such it will take extraordinary production rates and commodity prices for a very long time to justify that steep of an investment.
It's probably not anyone who cares about near term production cost who paid that price, it's more likely a guy like this
16.9K per acre can be paid off relatively quickly with a good agricultural financial consultant:
At 178 bushels/acre corn (2009 average for Nebraska) @ $7.26 per bushel (rate right now) that works out to $1292.28. Now if you used 100% of that to pay off the loan, not paying for seed, fuel, fert., etc... It would take 13 years to pay of the land. I'd say it's somebody whos thinking ahead for the next generation.
Dairy farmers around here are paying over market prices for the land to dispose of their manure ponds. So much manure per acre as per OEPA regulations. The more cows they want the more ground they have to lock up, rented ground isn't always the answer.
That's a pretty optimistic estimate, and is only 7.6% return before expenses. What if you take 2012 yield (likely much lower), a price that would occur if ethanol subsidies are permanently stopped, and take out the seed, fuel, chemicals, fertilizer, and a starvation wage? Would you ever pay it off?
Just another example of why we need to end agricultural subsidies. If they can afford to pay that much for land, they can afford to go without government handouts.
