This is the second in a two-part series. Part I published on Sept. 3.
ASHLAND — The COVID-19 pandemic and ensuing fluctuations in supply and demand caused the cost of almost everything to increase. The cost of running a farm was no exception.
Centerra Co-Op CEO Jean Bratton identified two commodities that have skyrocketed in price recently: land and fertilizer.
Bratton’s son told her that he’s seen some prices for an acre of land in Ashland County increase by $3,000 recently. After sharing this, Bratton asked other industry members in the room to verify this number.
Wayne Savings Community Bank Agriculture Commercial Lender Kristin Flickinger spoke about a farm she knows that had a highest bid of $1.2 million around four years ago. It recently sold for $1.7 million.
According to data from the USDA, the average value of an acre of farm land in Ohio was $6,600 per acre in 2021. Flickinger has seen land in Ashland County sold for as high as $17,000 per acre.
According to listings on Zillow, the lowest price available for a plot of land in the county is $5,686 per acre, but most of the other listings have prices around $10,000 per acre.
Marcia Lahmers, who works as a broker with the Ashland Board of Realtors, believes the price increases are due to more demand for large farms, she said.
“It used to be a small lot of acreage would bring more than the large lots. It’s actually reversed itself. So anything over 80, up to 250 acres brings more per acre now than a smaller plot,” she said.
“Because guys have big equipment, this is just one example, and they don’t really care to travel 20 miles for 50 acres.”
Sometimes, it’s not farmers who increase the demand for land.
Flickinger and Bratton both mentioned that investors’ demand for land in the county has increased recently, even if the investors have no plans to use the land for farming.
Amish and Menonites communities also have a high demand for farm land, and once they choose an area, prices for small farm plots often increase. Bratton said.
Farmers that don’t buy land still have had one major dent in their pocketbooks recently: fertilizer.
Since 2020, the price of fertilizer has risen significantly, doubling and even tripling in price in some cases, according to data from the World Bank.
Rising natural gas prices in Europe, trade restrictions with China, and the Russia-Ukraine War have driven fertilizer prices to levels not seen since the Great Recession, according to the USDA.
Unfortunately for the farming industry, the USDA also predicts that fertilizer prices will remain high and may even get more expensive in 2023.
The Future of Farming
These challenges to the farming industry are occurring at the same time the world needs to double food production by 2050, according to the UN.
In the face of this lofty goal and these economic challenges, Bratton has opted for faith over fatalism.
She pointed to the fact that in ideal conditions, 600 bushels of corn can be produced on one acre of land. Currently, farmers in Ashland County are happy to get 220 bushels out of an acre, she said.
To reach these theoretical heights, the industry will need good talent and good regulations, she said.
“We can feed the world. There is no doubt in my mind we can feed the world,” she said.
