Plans are underway to create the world’s largest urban farm in Detroit.

The parents of a dream.
Jimmy and Grace Lee Boggs may be the folks to thank for the urban movement in Detroit that plans to use abandoned and vacant property to create the largest urban farm in the world.  The two have been local activists and civic leaders for years and in 1992 founded Detroit Summer, a collective of citizens motivated to transform and reclaim their communities.
Every year for the past eleven summers Detroit Summer took people on tours of the city to visit centers and areas where local residents were farming in some of the most unlikely of environments.  And they were farming successfully, producing food, cleaning up neighborhoods, and, in turn, lowering crime and littering rates.  These have only been some of the many benefits that the plan has provided.

More benefits than just fresh food.
Some communities have been virtually transformed in that period of time and residents say they feel a much closer connection to a nature that they rarely knew before the project came along.
To date more than 350 urban gardens have been planted in and around the city, and all of them actively encourage anyone with a healthy curiosity to visit and learn about techniques that were used to make them a success.  

Big plans for the city’s future.
And the largest future farm of them all, Hantz Farm, is in the preliminary development stages, with Phase 1planning to utilize more than 70 acres of vacant and abandoned land on Detroit’s lower east side.
The project, which will help meet Michigan’s growing demand for local produce, plans to turn out organic fresh fruits and vegetables in addition to adding a much-needed natural beauty to that part of the city.
Thanks in part to Michigan State University and in cooperation with the WK Kellogg foundation, planning for Hantz Farm has included detailed examination of soil requirements and potential agricultural output.  
In addition, the farm also plans to use the heat generated by composting waste to produce geothermal energy and build several large turbines to harness wind energy as well.  All of these factors are helping to bring a new meaning to the term urban renewal and providing myriad benefits to these forgotten areas of a city in need of change.

-This post was contributed by Claire Webber, who writes about the best online schools. She welcomes your feedback at Claire.Webber1223 at gmail.com

"The swine flu is not caught from eating pig meat products, but several countries imposed import bans on pork from the United States."  (http://www.reuters.com/article/topNews/idUSTRE53N22820090427)
The United States exports nearly 20 percent of its pork and more bans on U.S. pork could harm U.S. hog and pork prices. Mexico is the No. 2 export market for U.S. pork. Russia banned all meat not thermally treated from Texas, California, and Kansas, as well as from Mexico, and raw pork from all other U.S. states. China also banned hogs and pork from U.S. states that have had mild human cases of the flu, while the Philippines banned U.S. and Mexican pork.

I keep a pretty close watch on the farmland investment and farm real estate markets in the US. I recently came across the following information/article on MortgageCalculator.org.  The information is geared towards traditional residential and commercial real estate investors; not ag folks.  I don't agree with everything the author has says, and it is certainly over simplistic in some areas, but I do feel it's important for you to know what the real estate investment sector is thinking and being told about your land.

It would seem that everybody in the real estate investment business is trying to figure out what to do next, and unfortunately, they might be coming to your neck of the woods soon.  You and I both know that absentee owners have been investing in our cropland for years, but this “concept” is still novel to most city folks. -Be advised, more townies will be driving down your county roads, looking for acreage, and mucking up your bids this year. The longterm success of farmland investments will cause the market to gain populatity which will put more pressure on you and make land acquisition more competitive than it already is. 

Here is the article below.

Bi-Coastal Idiocy Prevents Your Inner Real Estate Investor
From “Seeing” the
REAL Investment Gold Mine

“Foreclosure-jammed suburbs lap at the shore of America’s Heartland. “Keep it Simple Stupid,” because here is where the authentic real estate “bank” is still being earned.

Cash-generating farmland is hard to come by for one big reason: rock-bottom debt-to-asset ratio in the land sector has owners stuck like glue to their land assets. Cropland is abundant---400 million acres in the U.S.—but only a small portion of it is up for sale or rent. The dog-fight for that which does come available is as hairy a venture as is scrambling for the home-run ball smacked into crowded stands. Even seasoned farmers are frustrated when they make a good bid for land and lose.

You don’t have to leave your New York City, Miami, or San Diego home to own and operate a chunk of Iowa farmland any more. The playing field has been leveled. The real estate land game is drawing non-farm players as well as Ag pros. These savvy individuals-turned-investors may have been tipped to land auctions or sales, serendipitously stumbled on the notion, or were among the few with inside knowledge of real estate investing at large. However they came to own profitable acreage they nevertheless trained their inner real estate investor to “see” beyond the East and West coast corridors of self-absorbed real estate mayhem.

Getting a piece of cash-generating American Farmland means:

    * knowing about the most successful real estate GSE ever created and what built-in devices make it bullet-proof to the Fannie and Freddie debacle;
    * understanding the robust appetite for tomorrow’s biofuels;
    * keeping a level head in the midst of an urgent corn-based ethanol industry and its opposing forces;
    * opening yourself to investment models that invite non-farm ownership via lucrative land rent and lease agreements…and
    * respecting the industry and the farmers that grow and produce much of the stuff that contributes to your daily life function – consumables in your grocery store, the cotton in the clothes on your back, the electricity you suck down like lemonade on a Jamaica-hot day, and the fuel you pump into your car.

In mid-2007 an acre of top-grade cropland in Illinois was selling at a cash-generating $5 to $10k per acre, in some cases.(**1)

 Just 10 years earlier the per acre price in the state averaged $1,150. Land prices have since plateaued—one acre of arable land fetching anywhere between $2,500 and $7,000 depending on an assortment of factors steered by a breathing matrix of volatile conditions.(**2)

While farmers were making bank, the housing bubble in nearby Suburbia was going bust. And even considering the matter-of-course plateau in farm price, the course has been paved.
 
The Farm Credit System: A GSE That Actually Works

The buzzwords, “self-sustaining” and “self-contained” might describe the best characteristics of the Farm Credit System, a government subsidized enterprise (GSE) that actually works, and really well. Established in 1916 it was the first GSE. Its purpose was simple-- to extend credit to buyers of land via a much more streamlined and fair lending system than that used in the home mortgage business. Subsequently the federal government established Fannie Mae and Freddie Mac as the mortgage GSEs and for better or worse they have since become household names.

In its own words the Farm Credit System is,

“…a federally chartered network of borrower-owned lending institutions comprised of cooperatives and related service organizations. Cooperatives are organizations that are owned and controlled by their members who use the cooperative’s products, supplies or services.” (**3)

To rehash the tale of Fannie and Freddie would be like beating a dead horse, but here are the characteristics of the Farm Credit System that make it impermeable to the residential mortgage hornet’s nest:

    * Two supplemental entities, the Farm System Administration and an agency insurance fund provide ballast that the mortgage GSEs lacked—financial oversight that counters questionable lending instruments and practices, and an insurance safety net should the market suffer undo financial turbulence.

    * Mutual and transparent financial support among the network of credit cooperatives makes this GSE a mighty oak of a lending structure.

    * Financial sustenance directly from industry patrons and customer-owners in the cooperatives. Recently millions of dollars were paid back as dividends to co-op patrons, owing to the vitality of farming real estate.

    * Credit-based lending products which are conservative, carefully structured, and time-tested—nothing like the subprime loans leveraged for weak credit during the housing bubble heyday. (**4)

Twitter Sign of Life

You’re not likely to find Fannie or Freddie Tweeting their recent news to followers. But the Farm Credit System is doing just that. Follow this Twitter update and you are rewarded with optimism and good news. How’s that for a thriving real estate GSE?

New Energy Crops – Robust Appetite for Biofuel

 Ethanol fuel demand smacked the Ag Industry in 2006, hard, so in 2007 farmers were tugging back fallow fields and row crops were scrapped for corn—the new energy crop. Corn, a staple food crop, was suddenly worth a lot more money as a biofuel and it was a no-brainer. Farmers have the know-how to get it from seed to harvest—no learning curve.

Prices for corn in the U.S. went sky-high and farmers were understandably elated. In February 2007 corn was worth $3.20+ per bushel (**5) when in 2005 it had been at a decades low $2.00 per bushel. The demand has also led to runs in the market for rented and leased land options.

But corn-based ethanol production in this country is controversial, depending upon your perspective. Every major magazine that “sicks” journalists onto the scent of environmental culture has touted it as a scam, at the very least. (**6)

Pro Corn Produced Ethanol:

    * Has helped fuel price/value for corn and subsequently land value.
    * Provided fast entry into the biofuel market, helping to chop auto emissions. A number of states have already required gasoline to include up to 10% ethanol in emissions-hacking measures.
    * Obama’s Agriculture Secretary, Tom Vilsack, is a notorious corn-into-ethanol man. He was also a two-time governor of Iowa, which leads states in corn production, so don’t expect to see that energy crop murdered anytime soon.

Cons of Corn-Produced Ethanol:

    * Corn production sucks down nearly as much energy from seed to market as the ethanol it produces then outputs.
    * Alternative feedstock—crops for making fuel and other products—exist that cost exponentially less energy to produce, deplete far fewer soil nutrients, hog less acres to produce the same volume, and require less chemicals and fertilizers to nurture to healthy harvest: sugar beets, sugar cane, and switchgrass among them.
    * When farmers use corn as an energy crop they are NOT contributing to food production, and this is battering global food supplies.

Sure, land prices have been fueled partly by corn-based ethanol, but the news swirl over corn and ethanol is mixed depending on where you live and what you do for a living.

Ethanol production—largely corn produced right now -- is re-sectioning our oil lifeline to the Mideast. Short-term forecasts indicate that we will be buying 25% LESS oil from the war lords oil barons. (**7)

Wind Power—could it be the other energy “crop”…

Ag Secretary Vilsack—the Ethanol Man-- is also hip to wind power, the other energy “crop.”

Two recent federal grant programs benefit farmers’ investment in small wind energy systems:

    * The new American Recovery and Reinvestment Act allows residential and commercial folks alike a 30% tax credit on the costs of an under-100 kW wind turbine system, no limits imposed. (**8)
    * The Rural Energy for America program lets agricultural producers, aka farmers, apply for grant or guaranteed loan assistance with various “renewable energy systems.” This includes financial reward or assistance with small and large wind systems, as well as solar and biomass operations. (**9)

The upfront expense involved in building a small wind system is considerable, but this, like much of farming, is a long-term commitment. Return on the investment could take a few years or dozens of years depending upon, again, that breathing matrix of volatile industry factors. BUT with a wind system cranking out power, farmers can reap the rewards in slashed monthly energy bills.

Are You Open to Alternative Real Estate Ownership and Investment Models?

Population density maps prove the highest number of people live along the East Coast between DC and Boston; in the industrial hotspots around the Great Lakes, and along the California coast, particularly LA and San Francisco. We are clustered, save for a few outliers, along the East and West Coasts. Not anecdotally our major news networks broadcast from New York, so it’s not surprising that when you think of real estate you might be limiting your view of the acreage in your specific region—most of it residential and commercial. What might happen if you started to expand your notion of available real estate to embrace LAND ownership where there’s option for long-term value and even recurring income?

You don’t need to necessarily leave your home in New York City, or Charlotte, or Seattle to own land in America’s Heartland because…

Business is booming for renting and leasing high value farmland.

You don’t need to sell farmland to “see” the value. In fact the value is exactly what’s keeping many farmers and other investors holding fast to the acreage they already own. And it’s been luring in a small population, thus far, of non-farm buyers savvy to a good and alternative investment. You don’t need to farm the land to reap the value.

Two common situations in which land lease agreements are established:

    * Own the land and arrange a lease agreement with an experienced and established farmer that cannot afford his own land or needs to expand his operation.
    * Farmer with too many acres to operate himself can enter into a lease agreement with another farmer who agrees to farm extra acreage.

Land leasing can be a lucrative real estate option and in some areas the land grab is ultra competitive. But there are a lot of factors that decide the initial cost for land rental:

    * type of land and intended use
    * condition and quality of the land
    * responsibility of the tenant
    * access to the land
    * available water and other resources

3 common types of farmland lease agreements:

    * Crop share leases
    * Cash leases
    * Flexible cash leases

The flexible cash lease has become a popular lease option particularly given industry volatility—weather, harvest, fertilizer and seed price, etc. In many areas rental land is put up for bid and depending upon the perceived value and the condition of the market, could net a competitive price.

What about the expected slide in commodities prices for 2009? Surely that little nosedive will drop land values? The overall Ag industry could be about 10% short in earnings compared to 2008. Truth be told, the loss will likely have scant effect on generally well performing land values. (USDA)

Your Inner Real Estate Investor… Is She Now Considering a Broader View of Real Estate Investment?

Will your inner real estate investor prick up his or her ears when you hear, “arable farmland for sale or auction”?  Or will you remain one of the bi-coastal idiots that immediately disassociates – “farmland” doesn’t pertain to you, right?

You may not have considered cropland ownership before now. And maybe you can imagine fewer objections, fewer obstacles to buying land.

    * Long-term consistent performer
    * Can be managed as a non-farm owner
    * Future for biofuels and renewable energy is bright
    * Government incentives are on the side of the agricultural producer
    * Demand for rental and leased farmland is high

Fact is farmland is a consistent performer in real estate investment – the golden egg.

No, not like a one-shot million-dollar lottery ticket.
Not a here-today-gone-tomorrow stock windfall.

With the right amount of tending, farmland can be a long-lasting recurring income that can broaden your horizons in so many ways.”

**Sources

1.       NY Times, Ethanol Is Feeding Hot Market for Farmland

2.       Farm Business Management

3.       Farm Credit Services

4.       Farm Credit Services

5.       NY Times, The Price of Corn

6.       Rolling Stone, The Ethanol Scam

7.       Energy Business Daily, In Defense of Ethanol

8.       Farm Industry News

9.       USDA Rural Development

Article from: http://www.mortgagecalculator.org/helpful-advice/real-estate-idiocy.php

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In a press conference on April 16, National Farmers Union President Roger Johnson with other corn industry groups discussed a recently released Congressional Budget Office (CBO) report dealing with the economic and environmental impact of ethanol.

"The CBO report states what we have known all along, America's farmers are not a significant reason for increasing grocery store prices," Johnson said. "The report states that increased ethanol production caused a mere 0.5 and 0.8 percentage point increase in the price of food between April 2007 and April 2008."

Mr. Johnson went on to cite statistics that indicate that consumers actually save between $5.00 and $8.00 in gasoline costs for every extra dollar spent on food because of the increased supply of fuel provided by ethanol.

Johnson also pointed to research that shows that an average small box of corn flakes continue to cost $2.99; the “farmer’s share” is approx $.06, or less than 2%.  The “NFU is again calling for Congress to reconvene hearings to investigate higher retail food prices; while commodity prices have tanked since last summer’s peak, grocery store prices remain high.”

With commodity prices being extremely low in recent months, I have to ask the question, why haven’t food prices retreated?  The answer is simple.  The profit taking was/is being done by the food producers and resellers. This is a clear example of a well orchestrated marketing maneuver to raise prices, reduce portion sizes, and increase profits.  -All the while they are while blaming the hard working farmer down the road. 

Check this out: Here is a short audio clip of from the press conference.  (it is only 3:21 long)

(Archive) My Previous Posts on the Ethanol Topic

http://blog.alextiller.com/_bpost_2729/I_Have_Realized_the_Error_of_My_Ways

http://blog.alextiller.com/BlogRetrieve.aspx?BlogID=2729&PostID=54365

http://blog.alextiller.com/_bpost_2729/Kudos_to_Iowa_Senator_Grassley_for_his_response_to_Texas_Governor_Perry’s_Ethanol_Waiver_Request

http://blog.alextiller.com/_bpost_2729/Let’s_Point_some_Fingers_and_Lay_Some_Blame

http://blog.alextiller.com/BlogRetrieve.aspx?BlogID=2729&PostID=54385

http://blog.alextiller.com/BlogRetrieve.aspx?BlogID=2729&PostID=54395

http://blog.alextiller.com/_bpost_2729/The_Big_Boys_Fight_Back,_Farmers_Sidelined

http://blog.alextiller.com/BlogRetrieve.aspx?BlogID=2729&PostID=54418

http://blog.alextiller.com/_bpost_2729/Support_for_Ethanol_(Not_just_Corn)

http://blog.alextiller.com/_bpost_2729/Farming_Alternative_Fuels

http://blog.alextiller.com/_bpost_2729/Ethanol_Subsidies,_Good_for_Farmers_and_Tax_Paying_Americans

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