In 1951, my father bought a 160-acre farm between Brazito and Hickory Hill in southern Cole County. He paid $4,000 for the farm, which works out to be $25 an acre. It was a good cattle farm, with about 100 acres of grassland and several good, all-weather springs.
Why am I talking about a farm that came into our family 71 years ago? Actually, it’s quite simple. I want to show you how bad inflation has become and I think farmland is a good example of runaway inflation, and I’m unlikely to find anyone here in Osage County that is willing to talk openly about the increase in value of their family farm.
Dad died in 1975 and we continued to operate the farm for five years and in 1980 sold the place because it was not feasible to try to look after a cattle operation that far from Linn. We got $400 an acre for the farm, which was a 16-fold increase over what dad paid less than 30 years earlier.
With inflation running rampant, I recently wondered what land in that area was selling for. I inquired and found a reliable source that says a comparable sale took place recently in the Brazito-Hickory Hill area, and the land went for $8,500 per acre. That’s 21 times as much as we received for similar land 42 years ago. Or, another way to look at it, our old farm, if it brought the same per acre as the recent comparable sale, would go for 340 times what my dad paid for it.
That, folks, is inflation.
$8,500 per acre is funny money. It’s Monopoly money. It’s makes little sense and in the grand scheme of things is downright scary. It didn’t start yesterday. It started decades ago.
Also consider that between 1951 and 1980 dad’s farm went up in value 16-fold. In dollar terms it went up $375 per acre. Between 1980 and today, it went up by a factor of 21, but what I find most disturbing is that the value went up by $8,100 per acre. That’s a truly incredible increase. Only the federal government can print enough money to drive those kinds of price jumps.
What if the comparable that I used – the $8,500 per acre figure – is wrong. Even if that comp was wrong, I guarantee you that farm would sell for $6,000 an acre, and that’s still funny money.
Those 160 acres will carry about the same number of cows as it did in the 1950s and 1960s. There are several huge differences, however. My dad had a chance to make a few bucks when he ran 20 cow/calf pairs on a $4,000 farm. If someone bought that farm today and paid $8,500 an acre (a total of $1,360,000) how could he or she turn a profit?
These kinds of prices hurt all of us. Rising land costs fuel inflation. The highway department pays much more for land acquisition today than it did in the past. Businesses pay more for the land on which they build their factories and stores. When governments and businesses are forced to pay more for land, the consumer picks up the tab.
Today’s wild inflation is caused primarily by soaring energy prices, brought about by Joe Biden, not Vladimir Putin. But do not think for one minute energy prices are the sole cause of inflation. Our land prices have been jumping wildly for decades and greatly help to spur inflation.
Janet Yellen is Biden’s secretary of the treasury. Late last year and early this year Yellen and other Biden folks – along with the media – were using the term “transitory” to describe inflation. The use of that term was no accident, but it came back to haunt them. This inflation is not “transitory” or temporary, as they wanted us to believe then. Recently Yellen said she did not see this inflation coming. That’s impossible.
I brought you the story of land price increases in this area for the past 70 years. Many other places have witnessed even greater increases. Look at the cost of a college education, the cost of vehicles, entertainment costs. If you haven’t been to a movie recently, you need to go just to see the cost of popcorn. Over $20 for a big, buttered popcorn. (FYI, we don’t do popcorn at those prices.) Do you really believe Yellen when she said she didn’t see inflation coming? Fauci and Birk have admitted they lied about the Covid vaccine. Do you believe Biden or any of his clown group on anything? Do you believe the 2020 election was honest?
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