FARMING: Land Boom

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"Son, any man who buys land in Iowa today is a fool." The speaker, naturally, was an Iowa dirt farmer, sounding off last week on the rip-roaring boom in farm lands. He still remembered the World War I boom, in which Iowa land went to $255 an acre—and the bust, when it dropped to $69. So many went broke that in the early 1930's insurance companies held an area equal to eight Iowa counties. But others forgot to remember. Even in Iowa, fat with corn and hogs, a man could not make a long-term profit on land that cost him more than $101 an acre. By last week, the average price of Iowa land had climbed to $140 an acre.

The boom was even higher elsewhere. In South Carolina and Kentucky, land prices had more than doubled. In Montana they were up 82%. Farmers did most of the buying to cash in on skyhigh food prices, but everybody seemed to be nudging the new boom up.

Hats & Station Wagons. Farmers were adding to their acreage, or buying for sons back from war; onetime tenant farmers were back from war jobs, their pockets bulging with cash for land; and "windshield" farmers from the city, who thought a farm was a hedge against inflation, were cruising over the land as never before.

In the rich North Platte valley just outside Scottsbluff, Neb., Harold Baltes bought a farm for $364 an acre, roughly three times the local price in 1939. In the rolling, rocky hill country north of San Antonio, the old ranchers were moving back like Indians in the face of the assault from pale-faced city slickers. Land worth $8 to $10 an acre a few years back was going for as much as $100. Drawled one old rancher: "They want a place where they can keep some horses, have a big hat, boots and station wagon with their name on the side."

Cash on the Barrelhead. As yet, most farm experts viewed the boom with only mild alarm. Most of the farm-buying was for cash (in World War I, farmers sometimes had three and four mortgages on their land), and instead of sinking all their World War II profits in new land, farmers were using it to pay off mortgages on the old. Now, almost half of U.S. farmers own their land outright and mortgages on the rest are down to $5.5 billion, half the peak of the '20s but up $200,000,000 in 1945.

What might have caused alarm was the speed with which the average price of farm land had risen. By November 1945, land prices were 58% higher than in 1939. (During the comparable World War I period, the rise was only 36%.) If prices follow the pattern of the last boom, the steep climb is just starting.

Last time, it was after war's end that many farmers had loaded themselves up with the mortgages that broke them. Now the mortgage curve was starting up again, after steadily falling during the war years. But the amount of individual mortgages has increased to an average of 58% of the purchase price; in many cases the mortgage is larger than the value of the land in 1941. Would the farmers again shoulder mortgages to buy more land and equipment, now that manpower and machinery were once more available? No one was sure.