LUBBOCK, Texas (KCBD) – New data shows the value of Texas farm and ranchland is at an all-time high.
Some farmers believe this could spell trouble for the future of agriculture.
Agricultural land values have seen an increase for the fourth year in a row according to the USDA.
This year’s land value summary report shows the average value for U.S. farmland is up 5% at $4,170 an acre.
Texas is faring better at $2,800 an acre.
Michael Hutton, President of the Lubbock Association of Realtors, attributes the growth to a halo effect.
“Values have appreciated in the city and then that has affected the county which has also affected surrounding counties,” Hutton said.
Land prices depend on what it has to offer, such as access to water, a resource that is becoming more valuable in our area as the Ogallala Aquifer continues to shrink.
“Having good water on land is what makes the value and what gives you top dollar,” Hutton said.
While the price increase benefits landowners by enhancing their equity, Walt Hagood, a cotton farmer in Hockley County, says he’s concerned for new or beginning farmers.
“If you are a young farmer trying to get started, that pretty well takes you out of position of buying farmland. Pretty much all young farmers are having to lease land,” Hagood said.
The problem is cash rents have also jumped.
That’s an agreement where a landowner will allow a farmer to rent their land.
Here in Texas, renters are looking to pay an average of $46 per acre, 5% more than last year.
It comes as input prices continue to rise while commodity prices fall, hurting both the farmer and landowner.
“You are expecting a return on that, if you own that. Those pressures are going to be on the farmer to pay for that and everything else is inflated already. If we don’t get a better return on our crops how is anybody going to farm rented land,” Hagood said.
Hagood believes this plays just a small role in what he calls an economic crisis for agriculture.
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