The Lincoln times., 1955-01-10
Is Now The Time To Buy Or Sell Farm?

the dislocating influence cycles
the dislocating influence of ma
jor wars and the multiplicity of
motives that people exhibit in
choosing where" and when" to
buy farm land.
This brief discussion of fluc-
tuating land values will probably
raise more questions than it
answers. 1t seeks merely to be
thought-provoking and hiStori-
cally objective on topic that
means at lot, directly and indi-
rectly, to a lot of people.
Collapse After World War
Those who have made careful
historical studies of farm income
and debt and the prices of bath
farm products and farm land are
keenly aware of the economic
difficulties that wars create and
accentuate. Take World War 1 for
example: the index of farm land
prices for the nation climbed from
50 in 1915 to 105 in 1920 Q947 -49
100. This seemingly sharp rise
was, however. modest when COM
pared with realized net income
from agriculture, which jumped
from S36 billion in 1914 to 1913
billion in 1919. Significantly, net
income is always subject to much
more violent year-to-year change
tbo, SC tho 1avaI Of farm land
prices. Yet many farmers who
bought at the high levels of 1918
and 1919 and made moderate
Wn-paymentS found themselves
with mortgage payments which
were difficult to meet after in
comes dropped. Annual debt pay
ments which were no particular
burden in 1919 when tobacco was
A cents per pound and cotton 80
cents were hard to meet the fol-
lowing year when tobacco dropp-
ed to % cents and cotton to 16
cents. The impact on farmers
was more severe than the price
breaks indicate since the price
they paid for farm and house
hold purchases continued to rise.
It is not surprising that many
farmers fell by the wayside dur
inc the 20's and many more
tumbled in the early l930's. In
view of these severe experiences,
there is little wonder that people
who observed and studied the
strains and stresses of that period
came up with ultra-conservatlve
answers when considering Wheth-
er to buy a new, or to expand the
old, farm.
Thousands Start Farming
Whether prospects are good or
bad. thousands of young men
start farming every year and other
thousands buy farms or land TO
enlarge their farms. This leads TO
the oftheard statement that the
dominant factor affecting the
success or failure of a farmer is
| the period in which he started
farming. Certainly the farmer VINO
bought his land in l94l had a
much more favorable period IN
which to start than the one who
started in 1919 OF 1920. Oh
course. many who started tarmlng
in those earlier days made gooo
and. conversely, many who start
ed in l941 failed.
Several other factors add 10
the complexity of the farm real
estate market. Farm manage
ment studies point out clearly
that many farmers with limited
capital would have higher incomes
if they farmed as tenants. AS
tenants. their money would be
invested in machinery, livestock
and other required items tol
farms large enough to EMPLOY
effectively such equipment ano
some managerial ability. instead
sentiment frequently prevails ano
MANY decide to own their own
farms even though small and ire
Aouently poorly equipped. Closely
related is the feeling on the past
for MANY farmers that the oest
form for any sizeable investment
is in farm land.
There are many farmers Whc
regard a farm purchase as BUY
inc a business" in which they can
be selfemployed. There is less con-
Germ with the percentage return
on the investment. of how the "a
mount will compare with otnel
forms of investments. Otners
buv farms purely as investments
never expecting to operate tnelil
themselves. or to live on the lana
such differences in objective oo-
viously have distinct effects up
on the price a would-oe puy-
Ell will pay for a farm.
Part-Time Farmers
An important factor affecting
land values in the fifth district
land many other areas as Well)
is the residence value Of the farm
dwelling. According to the latest
census of agriculture, $4,000 OF
AZ percent of all farms in this dis
trict were classified as either
part-time or residential farms
Prices of many of them were IN
fluenced to a greater extent by
what the buyer would have had
to pay for a house in the nearby
city or town than the farms capa-
city to produce crops ana llVe-
stock at profit.
In one important respect. pur-
chasers of farms are li2e pur'
chasers of dwellings, automobiles
and the like. Frequently then
prime concern is with the amount