01/07/09 Farm values increasing

We don't have to remind anyone about the crash in real estate values over the past several years. The mortgage crisis and Wall Street collapse have reminded us everyday that homes are worth nowhere near what they were worth just 12 months ago. Cities like Las Vegas have seen property values diminish by as much as 50% and here in Idaho's urban communities the picture isn't a whole lot rosier. But wait. Is it possible that farm related real estate could not only be "not falling", but instead, increasing in value? "People are very interested in the estimates for 2008 in farmland and farm building values per acre." That's USDA economist Ken Erickson who is not just optimistic about farm real estate value&he backs it up with the fact that farm lands, farm buildings, and land acreage have appreciated by 15% in the last two years. (Erickson) "So we have growth in farm land values which is a very important component of farm household and farm business wealth." That said, debt in the farm sector is expected to rise again for the 5th consecutive year, but& (Erickson) "We're expecting that farm business equity to continue to rise as farm asset values rise more rapidly than farm debt. So the wealth of the farm sector is again maintaining its growth trend that it has experienced over the last years." And with food commodity costs escalating due to such factors as stronger global demand for food, increased U.S. agricultural exports, and the increased use of agricultural productsfor bio-energy uses, 2009 may be a very big year for farmers.