COLLEGE PARK, MD - The
average Maryland farmer is still
in good financial shape, according
to an agricultural economist at the
University of Maryland.
High land values give Maryland
farmers an advantage over their
counterparts elsewhere, says
economist Robert J. Reiter.
Therefore, he says generalizations
about the nation’s farm economy
do not hold true for all Maryland
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-Average Maryland farmer in good shape financially
farmers.
Farmers around the country are
crying the financial blues because
reduced land values have
decreased their borrowing power
and increased their debt. But
rapidly expanding populations in
the Baltimore and Washington
metropolitan areas keep Maryland
land values from following the
national trend, economists say.
Broilers and dairy producers
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made up over half of the state’s
farm receipts last year and kept
Maryland farmers financially
sound, Belter says.
But, he adds, the key to their
good standing is the potential to
plant houses when all other crops
fail.
City expansion has forced many
farmers to decide whether to keep
their land in production or develop
it into a residential or commercial
development. The big question is
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the effect of land value on receipts
and cost of production, Belter says.
Many of those running into
financial problems have expanded
beyond their means, he adds. He
says buying land and machinery
without considering its impact on
the total farm investment is one of
the worst things a farmer can do.
“What is their marginal return
on the real estate and machinery in
terms of the total operation?”
Beiter asks. “You only get so much
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ditional acreage. What does that
increased cost do in terms of total
farm income?”
Adding land and machinery
beyond the level that production
supports is one of the biggest
reasons for farm debt, Beiter says.
The problem is management. The
economist says farmers should
pay more attention to their costs if
they plant to keep their farms
financially afloat.
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