They never stopped making it

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farmland preservation Washington County, Pa.

Forty-five years ago, anyone hoping to be someone in American agriculture was offered the same, free advice: “Buy land; they’re not making it anymore.”

But “they” were making it. In fact, lots and lots of it.

Growing acreage

According to data reported by the United Nations, the world’s farmable land base grew by about 240 million acres between 1971 and 1991, or the equivalent of all 1975 U.S. corn, soybeans, wheat, sorghum and cotton acres combined.

The “not-making-it-anymore” believers, however, plunged ahead and U.S. land prices quintupled during the go-go 1970s, from about $200 an acre nationwide in 1971 to nearly $1,000 an acre a decade later.

Inflation and interest

Then, with inflation and interest rates heading to the moon and grain prices heading back to the 1960s, the not-making-it-anymore crowd began to not make it anymore.

Plunging land prices

U.S. land prices cracked in 1982, then plunged 40 percent in five years. In late 1985, the still-bleeding ag economy pushed a reluctant President Ronald Reagan to sign into law the most expensive farm bill ever; its three-year cost was an estimated $52 billion.

The White House also grudgingly signed a deal to bolster the crumbling Farm Credit System.

Farm Credit System

With the bruises of that hard beating still showing, however, farmers, farm bankers and farm magazines soon began to chatter about how land prices had fallen enough to once again “cash-flow.”

Most of the chats, discussions and stories ended with the same old admonition of farmers everywhere: “… besides, they’re not making it anymore.”

But “they” were — still. Between 1991 and 2011, according to the United Nations, “… global cropland grew by 78 million acres,” or nearly equal to America’s 1991 planted corn acreage.

Ag giants

Smack in the middle of that era, in November 2001, the U.S. Department of Agriculture issued a report on the fast-awakening ag giants to America’s south, Brazil and Argentina, to “demystify” what it called “sensational media accounts of vast resource potential” of the two new grain exporters.

Demystify or not, the report contained hard numbers about each nation’s available-to-be-developed arable land that were, by any definition, pretty sensational.

“Brazil contains the world’s largest remaining tract of virgin land–an estimated 547 million hectares” or 1.35 billion acres–with “as much as one-fourth,” or about 335 million acres, “readily convertible to agricultural activity.”

Pasture lands

And, USDA added, “… both Argentina and Brazil have huge areas under permanent pasture — an estimated 142.5 and 185 million hectares, respectively — where “as much as one-fourth…could be converted to grain and oilseed production under the right market signals.”

That’s another 200 million acres between the two. The market signals — chiefly price, but demand, too — were quickly given and, just as quickly, received.

Soybean production

According to USDA, American, Brazilian and Argentine soybean production, in million metric tons, grew (respectively) from 75.4, 35.0 and 26 in 2001 to a forecasted 107, 100 and 59 (again, respectively) by 2016.

Market-driven

So, no, “they’re” not “making” any more land but profit-driven farmers here, there and almost everywhere have, for generations, found more acres — often millions more and often in delicate ecosystems like rain forests, flood plains and dryland savannas — to grow more crops when markets call for them.

All this comes to mind as another generation of hot-money sharpies, dazzled by a couple of years of fat per-acre returns in crop farming, gather wheelbarrows of investor money to buy farmland around the U.S. and, now, the world.

The amount of land and the per-acre price they are paying, given today’s substantially lower commodity prices, however, not only look suspiciously high, most appear to be tied to little more than the fact “that they’re not making it anymore.”

But that’s not a fact, is it?

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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. farmandfoodfile.com

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