Leasing is a way in and a way to scale. Goodness knows we need as much of this transitional farmland as possible to go to our tribe and not to the corporate industrial tribe. An owned hub is great, but it can be much smaller than the managed acreage. Don’t frustrate yourself with partners that only want as much money as possible. That’s not a good fit. Work with landowners who want wildlife, soil building, better water cycles. Those are the things our eco-farming tribe can bring to the table.
In the late 1960s farmland prices began spiraling far beyond historic price-to-production ratios. When my mom and dad purchased the core property for our farm, the land was $90 per acre (in 1961) and feeder calves brought $150. You could raise half a feeder calf on an acre of pasture, a gross annual production value of $75.
At a price-to-production ratio of $90:$75, that was nearly 1:1. Today, it’s worth $7,000 per acre and that calf is $700. We receive no more rain, sunshine, or fertilizer than we did in 1961. At half a calf per acre, the new ratio is $7,000:$350, or 20:1.
I’ve talked to many older farmers (all of whom are now gone) in the community who acquired their land from a couple years’ production. I mean, their wheat, cattle, milk, etc. paid for the land in a couple of years.
That’s now an outrageous idea. Yes, some of the most successful micro-farms are buying land with production, but it’s rare. So where to from here? Virtually all agricultural experts agree that in the next 15 years, half of all America’s farm equity (land, buildings, equipment) will change hands due to the average age of farmers being 60 years old. Only 6 percent of farmers are younger than 35. Business gurus say that anytime the average practitioner in an economic sector drops below 35, it’s a sector in decline. Continue Reading →