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Why Many Virginia Farms Will Be Abandoned in the Years Ahead

Farm Business Management Update, October/November 2004

By Tom Stanley, Virginia Cooperative Extension Agent, Farm Business Management, NW

Most people driving down any of Virginia's rural by-ways would be somewhat startled to see cattle in the road, or at least cattle in the road will quickly get the driver's attention. The alarming title of this article is intended to draw the reader's attention in the same way.

Fences have been an issue of concern for Virginia agriculture since colonial times. This article will explain why I believe issues related to farm fencing will lead to the abandonment of many Virginia farms in the next 5 to 15 years.

Most agriculture in Central and Western Virginia transitioned away from small general livestock and crop farms toward more land extensive cattle grazing during the last half of the 20th century. The availability of relatively inexpensive fence wire was one factor that made this possible. Today, many of the fences that encircle Virginia's pastures are composed of materials put in place as far back as the 1950's. Since the time that these fences were installed, the cost of fence materials relative to the value of the pasture's product (i.e. cattle) has soared. Today, fences represent one of the most costly fixed investments for a livestock farm. New fencing, depending on type of fence and terrain, will cost a working commercial farm anywhere from $1.00 to $4.00 per linear foot. In the past five years alone, the price of woven wire has jumped 50% to 75%.

To put this increase in perspective, suppose a land owner is planning to put all new fencing on 100 acres of pasture. Suppose the landowner chooses an inexpensive type of fence and the total cost of the new fence including labor will be $2.50 / linear foot. If the 100 acres is to have a whole new perimeter and be split into four pastures in the simplest arrangement possible, the owner is looking at an investment of well over $31,000.

As people left farming and rented their land to neighboring farmers, the once well maintained fences were neglected. Ask any farmer who depends on rented land, and they will most likely tell you fences are the most worrisome problem with rented farmland. Two reasons explain/address why fences on so much Virginia pastureland have been allowed to decline.

First, many farms rental arrangements are simple verbal agreements renewed annually. Since fences are expensive and have a useful life of at least 15 years, farmer-tenants have been very hesitant to invest a great deal of time and effort into maintaining fences on rented land that they were not sure they would have access to in the years ahead. Second, profit margins in agriculture have narrowed and for the past 25 years less cash has been available to invest in to fixed investments like fencing. Landlords have tended to focus on the periodic check they could get from a farmer-tenant and not what was happening to their fences. Landlords too often have little appreciation for the relative costs and returns their farmer-tenants are facing.

The cattle market has seen some unprecedented high prices over the past year. Prospects for a profitable cow/calf sector extend as far out as five years. However, virtually all market analysts agree that the price of cattle will decline again eventually and Virginia cattlemen will eventually see hard times again like the marketing years of 1995-96.

I contend that with the next big downturn in the cattle market significant portions of Virginia pasture that are now rented for grazing maybe abandoned. Farmer-tenants are currently willing to 'make-do' on rented land with poor fences because their calves are worth $1.10 per pound. The next time the calves are only bringing $0.65 per pound, many of these farmer tenants will throw-up their hands and sell cattle rather than endure the headaches and liability of escaped cattle.

If you are a farmer-tenant or a landlord, I recommend the following to steps to prevent the decline and possible abandonment of a rented farm.

  1. Develop a written lease that has a provision for the farmer-tenant to keep the lease for multiple years.
  2. Depending on the relative rental rate for the farm, I think it is good if the landlord agrees to provide fencing materials up to a certain value each year with an understanding they will be used in a manner consistent with the mutual goals of the landowner and the farmer-tenant.
  3. Both landlord and tenant need to mutually agree what is expected in the way of fence and pasture maintenance and put it in writing. Ideally, at least once per year both the landlord and the tenant should inspect all parts of the farm together.

There are now and will continue to be profitable farming operations in Virginia. The farms that are profitable and well maintained in the future will be so because of the commitment of the owners and/or operators to the care of all the fixed assets of the farm, including its fences.

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