Economic pressures only add to the temptation of selling off farmland to developers.
Farmers over the age of 60 are particularly swayed by offers that present a higher return per acre than what they can earn through agriculture.
“In a lot of cases, they don’t have a lot of savings,” said Kent Strock, owner of Strock’s Farm Fresh Meets in Upper Allen Township and president of the Cumberland County Farm Bureau. “Their retirement program is in the land that they own.”
A number of factors make it harder for a farmer to turn a decent profit. Less profit means less ability to carry earnings over into savings from year-to-year.
“Say you have 100 acres of land,” Strock said. “You grow corn. Here in this part of the county a good yield is 225 to 250 bushels per acre. Corn prices last year hovered around $3.50 to $4 per bushel.”
At the maximum yield and price per bushel, gross income is $1,000 per acre or $100,000 total. But this is just the revenue, not the expenditure side of the equation.
“Now you start subtracting,” Strock said. “There will be a laundry list of expenses.”
That list includes the costs of chemicals, labor and equipment used to grow and harvest the corn along with the taxes, insurance and overhead to run a business.
“The bottom line is what you have to live on,” Strock said. “Now you are supposed to take a portion of that and save. That’s difficult and that’s everywhere. It’s the nature of the beast.”
But the $1,000-per-acre only works if the weather cooperates and if the harvest comes in at the optimal time in the ebb and flow of the highly volatile commodities market.
Storms, floods and drought could easily diminish or wipe out a crop while a major shift in prices and consumer habits could cheapen the value of the harvest. In the world of agriculture, even good weather can be a friend or foe.
“When you have a good crop year and everyone else has a good crop year, the price of your product goes down because there is more supply than demand,” Strock said.
“In this country, we have a cheap food policy,” he said. “If you look at what Americans spend on food compared to what other people are spending, you will find very favorable spending.”
While great for the consumer, this hurts the farmer because he is not getting as much for his product.
“Dairies are struggling with the low price of milk,” said Stephanie Williams, administrator of the Cumberland County Agricultural Conservation Easement program.
“There’s too much milk,” said Donald Basehore, a retired dairy farmer living in Hampden Township. “The kids are not drinking it in school.”
Other changes in consumer behavior have led to less demand.
In some areas of the country, there is such an oversupply of milk that dairy farmers are being cut off from their processors, Williams said. “Suddenly, they don’t have a place to take it, but you can’t turn the cow off.”
Dairy farmers still have to milk the herd twice a day and bear the astronomical costs of feeding and caring for the animals, said Tom Basehore, who took over the family farm from his father, Donald.
“Farmers are selling off cows because it doesn’t make sense to hold on to them anymore,” Williams said.
A difficult decision
Pennsylvania offers the Clean and Green program where farmers get a reduction in their property tax. But even with the program, farmers pay a disproportionate share of the real estate tax because they own the most land, Strock said. He said just because a farmer owns a lot of land doesn’t mean his earning potential in any given year is equal to or greater than that of a suburbanite who owns a $500,000 home.
Strock also said government regulations can add an expense in the form of fees and draw valuable time away from the farmer for him to fill out paperwork. This is especially true of regulations governing erosion and sedimentation plans and manure management.
So along comes a developer offering a farmer upwards of $30,000 to $40,000 per acre. How difficult a decision can that be?
“You have to be really committed to that piece of ground and really want it to stay in agriculture … bad,” Strock said. For some, the temptation is too strong so they sell the farm.
“That’s what has happened in a lot of situations in Pennsylvania,” Strock said.