Farms: Fat of the Land

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The price of U.S. farm land has been creeping up for 25 years, and lately the creep has turned into a sprint. On top of a 6% increase in 1964, farmland prices across the nation jumped another 6% last year, according to the Agriculture Department. In many areas, the gain was even greater. In Iowa's corn belt and Florida's citrus area, land prices have climbed 10% in the past year. Crop land in Sedgwick County, Kans., now brings $400 an acre, 32% more than it did only two years ago.

The same Crown Point, Ind., farm that was sold for $325 an acre a year ago recently acquired a new buyer at $500 an acre. In Texas' Montgomery County, 25 miles north of Houston and not far from an oilfield complex, pasture that went for $350 an acre in 1965 changed hands this year at $1,000 an acre.

Too Easy. Strange as it seems, the trend makes many farm experts distinctly unhappy. "It's too easy," says Bert Hanson of Pocahontas, Iowa, president of the National Institute of Farm and Land Brokers. "We're not really selling—just taking orders." At Kansas City's United Farm Agency, which sold 7,500 farms in 30 states last year, Vice President Norman McCain warns: "The supply of good farms is fast disappearing." Says Agricultural Economist William G. Murray of Ames, Iowa, "We have all the essentials for a land-boom bonfire."

Much of the price pressure comes from farmers themselves, who need bigger farms to make their costly equipment pay. As a result, over the last decade, the price of farm land has climbed 60% faster than farm income, thus confounding the economic axiom that the value of land depends on its profit potential. Farm prosperity—profits reached a 13-year high in 1965, and this year will surpass $15 billion—and the possibility of growing export crops under the Administration's "food for freedom" program also spur expansion.

Out from the Fringes. Farmland prices are jumping fastest on the fringes of cities, partly because speculators figure that population growth, low tax assessments on vacant land, and the growing net of federal highways will give them juicy profits. Also, inflation worries and stock-market jitters persuade some investors that land is a safer outlet. Heavy buying has lifted the price of farms near Minneapolis by 20% in the past year; land five miles from the center of Youngstown, Ohio, has quadrupled from $500 to $2,000 an acre in eight years. The city of Wichita recently paid $600 for cornfields along the Arkansas River that formerly brought $400 an acre, in order to use them as a city dump; other land near by with industrial possibilities is going for $1,000 an acre. "This has taken on the dimensions of a national land lottery," insists William H. Scofield, the Agriculture Department's top real-estate-research expert. "A few lucky owners will realize handsome returns. Thousands more will have to wait until cities really need the land."