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Farmland values hit record highs, pricing out farmers

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4 months ago

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Joel Gindo thought he could finally own and operate the farm of his dreams when a neighbor put up 160 acres of cropland for sale in Brookings County, S.D., two years ago. Five thousand or six thousand dollars an acre should do the trick, Mr. Gindo estimated.
But at auction, Mr. Gindo watched helplessly as the price continued to climb until it hit $11,000 an acre, double what he had budgeted for.
“I just couldn’t compete with how much people are paying, with people paying 10 grand,” he said. “And for someone like me who doesn’t have an inheritance somewhere sitting around, a lump sum of money sitting around, everything has to be financed.”
What is happening in South Dakota is playing out in farming communities across the nation as the value of farmland soars, hitting record highs this year and often pricing out small or beginning farmers. In the state, farmland values surged by 18.7 percent from 2021 to 2022, one of the highest increases in the country, according to the most recent figures from the Agriculture Department. Nationwide, values increased by 12.4 percent and reached $3,800 an acre, the highest on record since 1970, with cropland at $5,050 an acre and pastureland at $1,650 an acre.
A series of economic forces — high prices for commodity crops like corn, soybeans and wheat; a robust housing market; low interest rates until recently; and an abundance of government subsidies — have converged to create a “perfect storm” for farmland values, said Jason Henderson, a dean at the College of Agriculture at Purdue University and a former official at the Federal Reserve Bank of Kansas City.
As a result, small farmers like Mr. Gindo are now going up against deep-pocketed investors, including private equity firms and real estate developers, prompting some experts to warn of far-reaching consequences for the farming sector.
Young farmers named finding affordable land for purchase the top challenge in 2022 in a September survey by the National Young Farmers Coalition, a nonprofit group.
Already, the supply of land is limited. About 40 percent of farmland in the United States is rented, most of it owned by landlords who are not actively involved in farming. And the amount of land available for purchase is extremely scant, with less than 1 percent of farmland sold on the open market annually.
The booming housing market, among a number of factors, has bolstered the value of farmland, particularly in areas close to growing city centers.
“What we have seen over the past year or two was, when housing starts to go up with new building construction, that puts pressure on farmland, especially on those urban fringes,” Professor Henderson explained. “And that leads to a cascading ripple effect into land values even farther and farther away.”
Government subsidies to farmers have also soared in recent years, amounting to nearly 39 percent of net farm income in 2020. On top of traditional programs like crop insurance payments, the Agriculture Department distributed $23 billion to farmers hurt by President Donald J. Trump’s trade war from 2018 to 2020 and $45.3 billion in pandemic-related assistance in 2020 and 2021. (The government’s contribution to farm income decreased to 20 percent in 2021 and is forecast to be about 8 percent in 2022.)
Those payments, or even the very promise of additional assistance, increase farmland values as they create a safety net and signal that agricultural land is a safe bet, research shows.
“There’s an expectation in the market that the government’s going to play a role when farm incomes drop, so that definitely affects investment behavior,” said Jennifer Ifft, a professor of agricultural economics at Kansas State University.
Eager investors are increasingly turning to farmland in the face of volatility in the stock and real estate markets. Bill Gates, the Microsoft co-founder and a billionaire, is the biggest private farmland owner in the country and recently won approval to buy 2,100 acres in North Dakota for $13.5 million.
The number of private equity funds seeking to buy stakes in farmland has ticked higher, said Tim Koch, a vice president at an agricultural financial cooperative in the Midwest, Farm Credit Services of America. Pension funds also consider farmland a stable investment, Professor Ifft said.
Farmers, too, have witnessed an influx of outside interest. Nathaniel Bankhead, who runs a farm and garden consulting business in Chattanooga, Tenn., has banded with a group of other agricultural workers to save up to $500,000 to buy about 60 acres of land. For months, the collective has been repeatedly outbid by real estate developers, investors looking to diversify their portfolios and urban transplants with “delusional agrarian dreams,” he said.
“Places that I have looked at as potential farmland are being bought up in cash before I can even go through the process that a working-class person has to do to access land,” he said. “And the ironic thing is, those are my clients, like I get hired by them to do as a hobby what I’m trying to do as a livelihood. So it’s tough to watch.”
Mr. Bankhead characterized the current landscape as a form of “digital feudalism” for aspiring working farmers. Wealthy landowners drive up land prices, contract with agricultural designers like himself to enact their vision and then hire a caretaker to work the land — pricing out those very employees from becoming owners themselves.
“They kind of lock that person to this new flavor of serfdom where it’s, you might be decently paid, you’ve got access to it, but it will never be yours,” he said.
Unable to afford land in her native Florida, Tasha Trujillo recently moved her flower farm to South Carolina. Ms. Trujillo had grown cut flowers and kept bees on a parcel of her brother-in-law’s five-acre plant nursery in Redland, a historically agricultural region in the Miami area, about 20 miles south of downtown.
When she sought to expand her farm and buy her own land, she quickly found that prices were out of reach, with real estate developers driving up land values and pushing out agriculture producers.
A five-acre property in the Redlands now costs $500,000 to $700,000, Ms. Trujillo said. “So I essentially didn’t have a choice but to leave Miami and Florida as a whole.”
“Farming is a very stressful profession,” she added. “When you throw in land insecurity, it makes it 20 times worse. So there were many, many times where I thought: ‘Oh my God. I’m not going to be able to do this. This isn’t feasible.’”
As small and beginning farmers are shut out — the latest agricultural census said that the average age of farmers inched up to 57.5 — the prohibitively high land values may have ripple effects on the sector at large.
Brian Philpot, the chief executive of AgAmerica, an agricultural lending institution, said his firm’s average loan size had increased as farms consolidated, squeezing out family farms. This, he argued, could lead to a farm crisis.
“Do we have the skills and the next generation of people to farm it? And two, if the answer is going to be, we’re going to have passive owners own this land and lease it out, is that very sustainable?” he said.
Professor Henderson also warned that current farmers may face increased financial risk as they seek to leverage their high farmland values, essentially betting the farm to expand it.
“They’ll buy more land but they’ll use debt to do it,” he said. “They’ll stretch themselves out.”
Economists and lenders said farmland values appeared to have plateaued in recent months, as the Federal Reserve raised interest rates and the cost of fertilizer and diesel soared. But with high commodity prices forecast for next year, some believe values will remain high.
A native of Tanzania who moved to South Dakota about a decade ago, Mr. Gindo bought seven acres of land to raise livestock in 2019 and currently rents an additional 40 acres to grow corn and soybeans — all the while working full time as a comptroller to make ends meet.
For now, he has cooled off his search for a farm of his own even as he dreams of passing on that land to his son. The more immediate concern, he said, was whether his landlord would raise his rent. So far, the landlord has refrained because Mr. Gindo helps him out around the farm.
“He really doesn’t have to lend me his land,” Mr. Gindo said. “He can make double that with someone else.”
In Florida, Ms. Trujillo said, the owner of the land where her brother-in-law’s nursery sits has spoken of selling the plot while prices remain high, so he too has begun looking for his own property.
“That’s a big fear for a lot of these farmers and nursery owners who are renting land, because you just never know when the owner’s just going to say: ‘You know what? This year, I’m selling and you’ve got to go,’” she said.
In Tennessee, Mr. Bankhead said he considered giving up on owning a farm “multiple times a day” as friends who have been longtime farmers leave the profession.
But so far, he remains committed to staying in the field and doing “the work of trying to keep land in families’ hands and showing there’s more to do with this land than to sell it to real estate developers,” he said. “But the pain of not having my own garden and not being able to have my animals where I live, it never stings any less.”
Original Source: Farmlandgrab

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Farmers in Napak want security forces deployed in gardens

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1 day ago

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March 23, 2023

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A section of farmers in Napak District is demanding for the deployment of security personnel in gardens to prevent attacks by suspected Karamojong warriors.

This follows a message that was sent to one of the phones belonging to the community member in Nabwal sub county threatening people to stop cultivation or else their cattle will be stolen. Suspected warriors have also been dropping leaflets in the villages warning farmers of possible attacks in case they risk going to cultivate in their gardens.

Robert Koryang, a resident of Lotome trading center, says that they are worried of going to their farm gardens which are far away from their home because of threats from the cattle raiders.

Koryang said the warriors are still hunting for cattle and they see the farming season as an opportunity to target farmers who use oxen for ploughing.

He observed that the persistent insecurity in the region frustrated their efforts to cultivate last year leading to a hunger crisis.

Judith Anyakun, another farmer recalls that early last year a suspected raider chased them out of their farms before making off with four oxen that were used for ploughing.

She suggested that the security forces should be deployed in their settlements nearer to the fields so that they are able to respond to any attack that may occur during farm activities.

John Paul Kodet, the LCV Chairperson for Napak, says that they are taking the threats seriously because the warriors have been issuing warnings to the communities before attacking.

Kodet said they have distributed seeds to the farmers but he is skeptical if communities shall be able to cultivate due to threats from suspected warriors.

He noted that some villages in the sub-counties of Lopei, Lokopo, and Lotome are very distant from the military installations and this puts them at high risk of being attacked.

Kodet appealed to the government to tighten security in the targeted areas such that people will be able to cultivate without fear.

Denis Okori, the Napak Resident District Commissioner said that the security forces already have the intelligence about the planned attacks and measures have been put in place to protect the communities.

Okori said they have designed strategic plans on how the deployment will be conducted and therefore farmers should not get worried because the government is trying everything possible to ensure there is peace.

He also confirmed receipt of the phone used for sending threats and it has been taken to the Internal Security Organization for tracking.

Okori urged the communities not to worry but instead clear the gardens for farming in order to fight hunger in the families as security does its part to protect them.

Last year, the residents of Napak district suspended the use of oxen for ploughing over fears of being attacked by suspected warriors. The cattle were only kept from the confined kraals and only released during the day for grazing, and returned in the evening when the army took responsibility for keeping them.

Original Source: URN via The Independent

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Mbarara struggling to contain Rift Valley Fever, no livestock quarantine yet

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1 day ago

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March 23, 2023

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The government is reluctant at imposing the livestock quarantine on Mbarara despite registering five confirmed cases of death among humans resulting from Rift Valley Fever, the Resident District Commissioner, Emmy Turyabagyenyi Kateera has revealed.

According to Kateera , when they informed the Ministry of Agriculture, Animal Industry and Fisheries about the outbreak, they deployed a team on the ground to manage the situation. Mbarara District Veterinary Officer, Andrew Bakashaba, says that registered fifty cows infected by Rift Valley Fever in Rwanyamahembe Sub County on different farms.

He, however, says that they are currently managing the situation through sensitization. Bakashaba has warned residents against eating meat from animals that have died on their own, noting that Rift Valley Fever is only transmitted from animals to humans through infected meat.

He has also asked people to always watch out for meat that has a veterinary medical stamp as proof that it’s been tested and found to be clean. Turyabagyenyi said that they have directed extension workers to hold engagement and sensitization meetings with farmers and livestock traders on how to do self-preservation on their farms and the movement of animals.

PHOTO: The Jenner Institute

He said they asked the Ministry of Agriculture to hold on imposing a quarantine as they monitor the situation on the ground noting that if the situation goes out of hand they would be left without any choice but to announce the quarantine.

He says they have deployed veterinary doctors at all known slaughter slabs and asked them to double-check the meat before and after it is delivered to butchers.  Dr. Richard Atuhairwe, the in-charge of Bwizibwera Health Centre IV, says that the disease was detected among 30 people, and results from Uganda Virus Research Institute returned positive.  He says that five of the thirty have since died.

Rift Valley Fever is an acute viral hemorrhagic fever that is most commonly seen in domesticated animals such as cattle, sheep, and goats and can also cause illness in people. It is caused by the Rift Valley Virus. Meanwhile, a Quarantine has been imposed on Byembogo Village in Nyabisirira Town Council after a case of foot and mouth disease was confirmed on one farm.

Turyabagyenyi says a farm belonging to one Mr. Mungonya with over 1500 cattle had been stopped from sending out cattle and animal products like milk from the farm. He says that they have also temporarily closed the Kyeshema livestock market that is shared between Kiruhura and Mbarara districts noting that Kiruhura had last week closed its side.

He says they are now moving to vaccinate all animals in the village as they monitor the situation.

Original Source: URN via  The independent

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Kamwenge closes livestock markets to halt spread of Foot and Mouth Disease from Kazo

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1 day ago

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March 23, 2023

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Kamwenge District Veterinary Department has ordered the temporary closure of all livestock markets in the district to curb the spread of Foot and Mouth Disease-FMD to the area.

The District Veterinary Officer, Dr. Paul Mbago told URN that the decision follows the outbreak of FMD in the neighboring Kazo district.

He explains that his office held a meeting with stakeholders and livestock farmers in the district and they came up with guidelines to stop the spread of the disease to the district.

According to Mbago, they have written to the Ministry of Agriculture, Animal Industry and Fisheries requesting 10,000 doses of the FMD vaccinate to vaccinate livestock in Bihanga and Nkoma sub-counties, which border Kazo district.

Last week, Kazo district confirmed the outbreak of the highly contagious livestock disease at a farm in Bwatama village in Buremba Town Council.

Original Source:URN via The Independent

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