Framing The Farming Business

November 27, 2002
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GRAND RAPIDS — Only time will tell what effect a Purchase of Development Rights ordinance will have on the farming industry in Kent County in the coming decades.

The last 20 years have left the county with fewer farming acres and farms, but each farm is slightly larger. And over that period, the total market value of the products produced by these farms hasn’t kept up with inflation, but the average sale per farm has exceeded it somewhat.

According to U.S. Department of Agriculture data supplied by CPA Kent Hildebrand, CFO and investment specialist at Grubb & Ellis/Paramount Properties, the number of acres devoted to farming in the county has fallen over the past two decades.

In 1978, there were 229,513 acres devoted to growing in Kent County. But by 1997 that acreage dropped to 186,453, a decline of 43,060 acres or 18.8 percent of the total farmland that existed in the county 20 years earlier.

There are fewer farms, too. There were 1,461 in 1978. By 1997 that number fell to 1,136, a loss of 325 farms or 22 percent. The average size of a farm grew a bit over that time frame, though, going from 157 acres in 1978 to 164 acres in 1997 — an increase of 4.5 percent.

The market value of the county’s agricultural products doubled from 1978 to 1997, going from just under $60 million in 1978 to just over $121 million in 1997. The average-sale-per-farm figure rose even higher, jumping from $40,444 in 1978 to $106,550 in 1997, a hike of 163 percent.

But when the Consumer Price Index is factored in, the market value of the county’s ag products should have been $145 million in 1997 and not the $121 million reported — a 17 percent lag.

The per-farm market value, when adjusted for inflation, however, was higher than it should have been. Instead of the $106,550 average found in the 1997 USDA data, the adjusted figure should have been $99,573, or $7,000 less, by CPI standards.

For the record, the federal government reported that inflation grew by 146 percent from 1978 to 1997.  

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