I mostly agree with the trends and concerns listed in the October “Editor's Roundup” (page 4) but you omitted one of the most important problems. That is over-regulation being proposed by environmental activists, legislators and regulators. I'm referring to the effort to get livestock manure listed as an environmental hazard, regulation over agricultural dust emissions, and new hay-hauling requirements, all of which fall way short of common sense.
Given all these attempts to regulate ag, I assume the best thing is just to buy all our food abroad and contribute even more to the trade imbalance. Once regulators have their way, the government hopefully will buy out all us farmers and retrain us for more useful and environmentally friendly occupations.
The reality is many of us won't be willing to become slaves to the paperwork that comes with government over-regulation, and we'll quit. Let the foreign nations supply us with “healthy and safe” food.
J. L. Meagher
Elbow Lake, MN
More “clothing” for cows
The October article on functional cow traits, “Her Working Clothes” (page 22), left out one important “clothes” item. Call it capacity, “big middle,” or whatever, but a cow is primarily a roughage mill. The more the rumen (paunch) can hold — short of the grotesque — the better.
There's a nursing calf at side to feed, the necessity to rebreed in a timely fashion and hold the pregnancy, some flesh (tallow) to lay on against the coming winter, and — in that winter — the job of nourishing a growing fetus while maintaining herself.
True enough, the big-middled steers look and are graded as “wasty” in a feedlot. But much of their diet is concentrates and an operator can buy long-bodied, “Slim Jim” bulls to sire that kind of calf.
But a pencil-gutted cow, one with a nice long, trim-bodied look and not much rib spring can be a short-lived, money-losing proposition. That's especially true where summer grasses cure up early and the winters sometimes are long and plenty tough. Believe me, I speak from experience.
Pastureland values are puzzling
Your October issue story by Mike Fritz on pastureland values, “Still On A Tear” (page 32), has Georgia pastureland valued at $7,150/acre. I have lived in Georgia for 60 years, been in the land business for five years, and in the cattle business for 30 years. I've never known nor heard of anything related with farming and cattle pasture being at or near $7,150/acre. Where do these numbers come from?
Mike Fritz responds:
The land value data comes from USDA's June Area Survey. Land value and cash rent figures are estimates of state averages. Visit: http://usda.mannlib.cornell.edu/usda/current/AgriLandVa/AgriLandVa-08-04-2006.pdf
As you know, land prices can vary dramatically based on soil type, topography and proximity to urban areas. Your email doesn't indicate if you're near an urban center but generally urbanites have become dominant buyers of pasture for hunting and recreational use. Much of the pasture in counties surrounding metro Atlanta now trades as (speculative) transitional land for future home-site development.
Indeed, pasture in an attractive rural setting is often fetching a higher price than bare productive cropland in southern Georgia.
Georgia land values have also been driven the last few years by robust demand from Floridians who have sold their Florida holdings and re-invested the proceeds in less expensive Georgia parcels. All these factors push up the state average for pasture. This phenomenon is occurring in many eastern states. And you are right in that these values have no relationship to the income potential from ag use.
In terms of the reliability of the USDA data, the agency's pasture data is less accurate than its cropland data. But USDA believes it obtains sufficient responses to derive accurate estimates. In my experience examining USDA land value data, I'd say USDA lately has been struggling to keep up with how rapidly values have escalated.
On a macro basis, ag land values have reached a record-high on both a nominal and inflation-adjusted basis. Buying in today's market requires a thorough understanding of local conditions and the financial capacity to carry the land for at least five years.
Mike Fritz, owner of Mercator Research LLC, in Monona, WI, is editor and publisher of Farmland Investor Letter®, a monthly subscription newsletter providing farmland market insight and intelligence for farmland investors and managers. He can be reached at [email protected] or visit www.farmlandinvestorletter.com.