Abstract
The book value of assets employed on U.S. farms is approximately six times the farm value of products shipped. Consequently, even at present price levels the return on assets in farming averages only three or four per cent. As farmers become more businesslike managers and as inherited assets decline in relative importance such a low rate of return will become intolerable. Accommodation will require either a collapse in farm land prices or a continued substantial increase in farm product prices. In the face of persistent excess world demand for food it is unlikely that land prices will decline appreciably. Therefore, farm product prices can be expected to continue to rise sharply throughout the foreseeable future.
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Kastens, M.L. Food, food prices and price/earning ratios. JAMS 3, 259–264 (1975). https://doi.org/10.1007/BF02729285
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DOI: https://doi.org/10.1007/BF02729285