Land Prices Skyrocket

Farmland values are increasing in the double digits. Prices for commodities such as corn and cotton are up an average of 41% over last year, driven by global demand. And farm household income is averaging more than $89,000 annually.

But for Lloyd Arthur, who grows cotton in Crosby County northeast of Lubbock, there's just not much cause for celebration. Arthur has seen his diesel, fertilizer and herbicide costs skyrocket right along with commodity prices in the last year.

"My input costs – what it costs for me to put crops in the ground – are significantly higher than a year ago, and they keep rising," Arthur said. "I built a little wiggle room in the budget, and now that's all gone. It really puts things into perspective."

Farmland values rose 18.4% in Texas to $1,480 an acre last year. And the U.S. Department of Agriculture estimates farm household income nationally rose 6.6% over last year.

Like their city cousins, Texas farmers are feeling the pinch in higher costs for gasoline and diesel fuel brought on by rising oil prices. And higher costs for fertilizer, herbicides, farm equipment and irrigation are also taking a toll. The volatility of the commodities market has kept many farmers like Arthur from locking in higher cotton prices in the futures market.

The picture of American farmers suddenly rolling in wealth is misleading, said Jim Sartwelle, an economist with the American Farm Bureau Foundation.

"Many Texas farmers, particularly those in the commodity market, are getting a good price – and they're paying a good price to get it," Sartwelle said.

Farm Bureau research indicates that the farmer's share of the retail food dollar slipped from 30 cents in 1980 to 18.5 cents in 2006.

Source: Dallas Morning News