Farm and Food File: I must confess: I don’t have a clue


A furrowed brow and clenched teeth usually accompany the phrases “Officer, you’re right,” and “I don’t know.”

The former hasn’t split my lips since, oh, probably 1974, but the latter is quickly becoming a staple of daily conversations with farmers and ranchers emailing or telephoning to ask how long today’s grain and land markets can continue their fast climbs.

Same answer

These brief chats often go like this: “A neighbor just paid $8,000 an acre” — indeed, a farmer did pay $7,900-plus per acre for 160 acres in my neighboring township three weeks ago — “and I’m wondering if that makes sense?”

Uh, I don’t know.

“Beans are in the teens; now on to $20?”

Hmm, I don’t know.

“Are Minneapolis wheat futures prices for real?”

Could be, but I really don’t know.

What I do know is that today’s highly oxygenated grains prices, if adjusted for inflation, are not even in the same ballpark with those of previous glory years like 1914, 1973 or even 1995.

For example, today’s inflation-adjusted price for those breathtakingly-high, July 1973 soybean futures of $12.90 per bushel is $61.33. Stop rubbing your eyes; you read right: $61.33. Per bushel.


The up-to-date figure comes courtesy of the Bureau of Labor Statistics “Inflation Calculator” found at (under the heading “Get Detailed CPI Statistic.”)

Plug in the price you want updated, the corresponding year that price was achieved, click “Calculate” and the old price is instantly updated to account for the intervening years’ inflation.

That little exercise in finger gymnastics, however, does not mean 2008 soybeans will run up to $61. What it actually means is that today’s soybean futures need to top $60 to achieve the equivalent purchasing power those $12.90 beans had in 1973.

Puny prices

Similarly, if historical highs for other commodities are plugged into the calculator, today’s futures prices appear downright puny.

For example, December 1973 corn futures hit $3.40 per bushel in mid-July that year. Converting that relatively fat price then into 2008 dollars means corn must nudge a nose-bleedingly high $16.16 per bushel today to be in the very thin air of 1973.

If the same inflation calculator, though, is used to put today’s farmland prices into perspective, land prices are anything but puny or lagging when compared to go-go prices seen in the last 100 years.

For instance, the national average price for farmland in 1920 — the year land prices peaked before their slow, bloody slide to a 1933 bottom — was $69 per acre. That $69, in 2008 dollars, is equivalent to $728, a national average farmland price now years in the rearview mirror of most farmers.

Farmland prices next peaked in 1982 when the national average topped out at $823 an acre before cracking up and bottoming out at $599 in 1987. That $823 is, in inflation-adjusted dollars, equal to $1,800 today.

That updated, average national farmland price, too, was surpassed long ago.

Indeed, according to recently released USDA data, 2007 farmland prices averaged $2,160 per acre, 14 percent over 2006’s price.

Multiple choice

Given the above figures, today’s farmland price is:
a.) far above the inflation-adjusted prices of previous historical highs and due for a crack-up;
b.) justified by today’s relatively good commodity prices and easily could climb if commodity prices rise to equal the purchasing power of their historical highs;
c.) roughly equivalent to the auction price of a mint, mid-1960s John Deere 4020: it is whatever one person is willing to pay on any given day;
d.) all of the above or
e.) none of the above.

Of course, there could be some other explanations, also, but, uh, I don’t know.

(Alan Guebert’s Farm and Food File is published weekly in more than 75 newspapers in North America. He can be contacted at
© 2008 ag comm


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Alan Guebert was raised on an 800-acre, 100-cow southern Illinois dairy farm. After graduation from the University of Illinois in 1980, he served as a writer and editor at Professional Farmers of America, Successful Farming magazine and Farm Journal magazine. His syndicated agricultural column, The Farm and Food File, began in June, 1993, and now appears weekly in more than 70 publications throughout the U.S. and Canada. He and spouse Catherine, a social worker, have two adult children.



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