Blade, The (Toledo, OH) (KRT) -- January 30, 2008 -- Mary Meyer forked out nearly three quarters of a million dollars to enlarge her northwest Ohio farm by 15 percent last year. But with the price of crops up and demand for land high, she feels lucky to have snagged the 170-acre parcel for $4,300 an acre.
"I think prices will continue to go up as long as the grain market stays good," said the 48-year-old Ottawa resident who has nearly doubled her family's farm to 1,500 acres since taking over in 1997 when her father died.
Amid record-breaking grain prices, cropland values last year soared 11 percent in Ohio, 15 percent in Michigan, and 13 percent nationally, according to the U.S. Department of Agriculture.
At $3,920 an acre, Ohio bested the Michigan average of $3,450 an acre and the U.S. average of $2,700.
And in fertile areas of northwest Ohio, values are even higher. In a survey last spring, the lender Ag Credit, of Fostoria, found that top land was fetching $4,500 in several places in the region. Those places included Wood County, up 2 percent, and Henry County, up 10 percent. The figures are for land kept for farming and none converted to housing tracts.
Current values probably are higher, said Bill Eirich, chief appraiser for Ag Credit.
"Values have gone up since spring," he said, attributing the gains to price increases for corn, soybean, and wheat since autumn, along with land purchases as income-tax strategies.
Last spring, cropland averaged $3,000 to $3,500 an acre in Hancock County, he said. But over the past three months, four farms sold at an average of $4,300 an acre there.
"It's like a leapfrog effect," Mr. Eirich said.
Joe Newlove, a Wauseon auctioneer who specializes in agricultural property, speculated that the increases are being driven by rising demand for corn from producers of the gasoline substitute ethanol.
Grain prices have been at or near record highs in recent weeks, added Jim Swartz, assistant manager of Luckey Farmers Inc., an agricultural cooperative in Luckey.
Wheat has been trading at more than $9 a bushel, soybeans at nearly $12, and corn at about $5.
Besides ethanol production, factors include rising exports driven by the falling U.S. dollar and growing world population, Mr. Swartz explained.
Despite problems in other sectors of the economy, confidence is rising among farmers, agriculture experts said.
"We're seeing farmers bidding up rent and land prices with the expectation that they will be able to grow crops quite profitably," said Joe Logan, president of the Ohio Farmers Union, a lobbying group.
"This is a phenomenon that has been a little scarce the last 10 years."
Ms. Meyer, the farmer in the Putnam County village of Ottawa, plans to continue to add to her holdings. Four employees help her run the farm, which has been in her family since the 1940s.
Although that the good times will continue, she can't forget the experience of the 1980s when interest rates skyrocketed and farming crashed.
For now, however, she closely tracks grain prices and watches with satisfaction as they stay strong.
Gary Pakulski at email@example.com, 419-724-6082.
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