Survey finds Indiana farmland values up most since 1970s

INDIANAPOLIS (AP) — Indiana’s farmland prices soared nearly 20 percent in the past year – the biggest such increase in three decades – in a surge tied to corn and soybean prices driven higher by the growing demand for biofuel, a Purdue University survey has found.

Between June 2006 and June 2007, farmland values rose between 17-19 percent across Indiana, while cash rents – what landowners charge to rent land to farmers – climbed 9-10 percent from the June 2006 level.

The last comparable increase was in 1977, at the tail end of a four-year surge in American grain exports, said Craig Dobbins, a farmland economics specialist with Purdue extension.

Although exports drove the 1970s land value surge, he said this time around the driving factor is largely the demand for corn for Indiana’s booming ethanol production industry. A lesser factor is demand for soybeans in making biofuel, he said.

“When the markets for corn and soybeans took off, we saw quite a rise in land values. They’re the largest increases since 1977, so history is kind of repeating itself,” said Dobbins, who coordinated the Purdue survey.

That survey, which is conducted each June, found that the average statewide value of bare Indiana cropland ranged from $2,991 an acre for poor quality land to $4,407 an acre for top quality land. Standard quality cropland had an average value of $3,688 an acre.
For the 12-month period that ended in June, that was an increase of 19.2 percent for poor quality, 16.6 percent for average quality and 16.9 percent for top quality land.

Farmland broker Brett Salyers said he watched with astonishment in February as a parcel of Grant County land he intended to buy sold at auction for $5,100 an acre – far above the $4,500-$4,600 an acre he thought it was worth.

Salyers, a broker with Halderman Farm Management and Real Estate Services in Greenfield, Ind., said the company is gearing up for dozens of land auctions this fall and expects that prices will remain strong despite the dry summer and recent drop in corn prices.

“We’re still seeing a strong market. It certainly hasn’t gone down,” he said. “I don’t think it’s gone up a whole lot since this spring. That’s kind of when it was at the height of the excitement. But long-term, I still think it’s an upward trend.”

Dobbins said aside from the higher prices being commanded by corn and soybeans, the increase in land values is also being driven by relatively low long-term interest rates and a limited supply of farmland being offered for sale.

He said landowners who’ve seen rising property taxes and other higher costs are now raising the prices paid by farmers who rent their land. Like any market shift, Dobbins said, some people win and others lose.

“I guess if one were thinking of retiring and getting out of farming, now may not be too bad a time to do that,” he said. “But if you just got into farming and are trying to expand, this probably isn’t all that good of news.”

The “Farmland Value and Cash Rent Survey” is available online at www.agecon.purdue.edu/extension/pubs/paer

Appeals court: County should not have issued permit

INDIANAPOLIS (AP) — Planning officials incorrectly issued a permit that allowed construction of a northern Indiana hog farm that raises 1,000 swine, the Indiana Court of Appeals has ruled.

Although the court ruled in favor of two neighbors who sued over Jonas Hilty’s permit, it’s unclear what effect the ruling will have on the farm, which is already in operation.

At issue is Hilty’s 2006 application to the Adams County Plan Commission to construct a hog-finishing facility capable of holding 1,000 hogs at a time.

According to the county’s livestock operations ordinance, Hilty must own or have a long-term lease on at least one acre for every 10 hogs, or 100 acres.

Hilty owned 20 acres on which he could spread manure, so he entered into a lease with Ruth Wilder for an additional 125 acres.
Opponents fought the farm before the plan commission based on the odor of the hogs and the expected decrease in property values, but the permit was granted.

Neighbors Rick Cook and Daniel Funk later sued, arguing the lease doesn’t fit the legal definition of being long-term because it is a one-year lease with automatic annual renewals and a cancellation notice of 180 days.

The ruling said there is no precise precedent on this issue. Judge Michael Barnes said in a concurring opinion that “common sense tells me one year is not long-term.

“The ordinance calls for a ‘long-term’ lease in order to ensure, I assume, a place to spread the manure for a defined, lengthy, and fixed period of time. The lease at issue here does not do that in my opinion,” he wrote.

Neil Ogg, Adams County building commissioner and plan director, said the county issued the permit allowing Hilty to build and operate the hog farm after the local court found in the county’s favor. He conceded there was some discrepancy between the lease agreement contract and the ordinance.

“It was an unfortunate situation,” Ogg said. “We’ll see what this means.”

Neal Blythe, attorney for the neighbors, said he is pleased with the decision but hopes to see more state and local oversight in the future rather than just rubber-stamping projects.

The plan commission has 30 days to appeal the decision to the Indiana Supreme Court.

Rust found in Miss. soybeans

STONEVILLE, Miss. (AP) — Asian soybean rust, a fungus that can wipe out a field of soybeans if uncontrolled, has been found in fields in Mississippi.

Lee Taylor, a retired employee of the Mississippi State Extension Service, found the first signs of the rust on Aug. 10 in Pearl River County, which borders Louisiana in the state’s southwestern corner.
Two days later, Tom Allen, a plant pathologist, found the disease on soybeans in a sentinel plot in Stoneville in Washington County in the Mississippi Delta.

The northwestern region of Mississippi produces more than 80 percent of the state’s soybean crop.

The fungus also has been confirmed in commercial fields in Arkansas, Louisiana and Texas. Allen discovered the rust during a routine check of soybean sentinel plots. MSU’s Extension Service uses sentinel plots each year to monitor the appearance of soybean rust throughout the state.

“I noticed the characteristic raised lesions on the undersides of the leaves,” he said. “After performing a stick test, I received a positive response.”

Extension personnel continue to scout sentinel plots and commercial fields in Mississippi for signs of rust. They have not found additional occurrences. This year, farm experts first found rust in Mississippi on July 12 in Wilkinson County.

Experts said more than 50 percent of Mississippi’s soybeans are past the most susceptible stage for soybean rust devastation and that hot daytime temperatures and dry conditions projected during the next week will slow the disease’s progression.