03/05/08 Farmland Prices

My great great grandmother was always accused of being "land rich" and money poor. She would probably be reveling in today's demand driven market. But the beginning farmer is certainly feeling the bite of the current farmland price boom. In 2006 and 2007, farmland prices averaged 46% higher than capitalized values. Capitalized values being a measure of what the land can earn from agriculture. A large percentage of respondents to a recent on line poll said that land was "way overpriced" or "somewhat overpriced." But is it really when you consider today's high commodity prices and the rising global demand for grains and corn in particular. Or that in six out of the last seven years the world has consumed more food than it has produced. We can grow more food, raise more cattle, make more petrol, but we can't make more land. Should land values be so high? I was raised to believe that land was invaluable, the best investment you could make. But sadly, in todays ever rising market how many people will be able to continue to make that kind of investment?