Harry Smith was smart enough to see the big picture in Iowa last week. It wasn't the Iowa Caucus, it was Iowa land prices!
Click on the video even if you have watched it once or twice. It is a really good piece worth studying. It reflects the sentiment of the handful of farmers in this country who are healed and optimistic enough to bid these kind of crazy prices for farmland!
Just last week the local news was "Stertiz Farm Sells For $14 Million." Just think of the economic difference of farming Illinoian Glacial Till in Southern Ohio versus those prime prairie soils of Northern Iowa for 3, 4 and 5 times more investment per acre! It kinda blows my mind that ecnomically depressed Ohio farmland could be that much cheaper than Iowa farmland. The difference has never been any greater in my lifetime.
Our farmland in southern Ohio may be 10 times older, according to soil history, but the yields aren't 3, 4 or 5 times less. They probably can't double our yield in a ten year time frame so what gives? Is Iowa land really that much more valuable than Ohio land?
I don't think so. I think the family near Columbus who bought the Highland County farm is better off than the fellows who are paying these outrageous prices for Iowa farm ground, but who am I to judge?
It just so happens that Iowa farmers are in a position to bid these prices for farmland. I think people are realizing the value of land more than they ever have when everything else seems to turn to dust. It's ironic that "dirt" is now worth more than other assets that quickly turn to dust.
This is the news. Farmland is the bright focus in 2012 where we find the world population at six billion people and the US population at nearly 313 million. America is at the forefront of providing food and fiber for those booming populations and demand has never been greater.
It is an interesting time to be living, that is for sure!
Ed
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