Right now, all the attention is on the housing market, but a survey from the Nebraska Farm Real Estate Market says strong crop prices have driven up farm land values 25 percent since last year.

Farmer Larry Knuth of Grand Island said, "There's no doubt there's going to be foreclosures. Ag is always the last to get hit in the form of a recession. As the housing market picks back-up again, ag is always the last one to get hit. But it gets hit the hardest."

Local farmers said there's no way to make a profit now unless farmers already have everything paid off.  Knuth isn't looking forward to the future of a Nebraska tradition. 

"Years ago, farming used to be fun. The fun has been taken out," he said.

Economists say the slow housing market should turn around later this year, but farmers will continue to see a down-turn. Knuth said the taxes will be the biggest problem down the road.

"The taxes, that's what's going to get you. Land prices are way out of line. Our input costs
are killing us," he said.

Those costs come from corn demand and that's part of what Knuth and his cousin, Roy Stoltenberg of Cairo, feed their livestock. It costs Knuth almost $15 a day more to feed his cattle than last year. That's $5,500 more a year, out of his pocket. 

"You hear horror stories like this...if you think this is bad now, wait until next year with
fertilizer costs," he said.

Knuth and Stoltenberg would like to someday pass down the farm to their sons.
  

"Someone's got to farm the land," Stoltenberg said.

"I think he'd like to," Knuth said of his son, "but 5,000 an acre ground, it's almost impossible for a young guy to buy something."

Knuth doesn't see the farm business turning around anytime soon.

"Politicians talk about change. But I don't know how their going to change anything.  Everything is so messed up," he said.

What scares the two cousins the most is the future of American farming. 

"I just feel like corporate farming is going to take over," Knuth said.

"We believe it should be the rural economy.  If people farming the land are the owners, they spend our money locally and it helps local businesses," Stoltenberg added.

"If corporations get their way, you think we have high prices now, just wait till they take over," Knuth said.

Reporter's Notes:  Stacia Kalinoski

Both farmers said the only way for local farming to stay alive with rising corn and machinery costs is taking over a family farm.  They said farming is way too expensive now with machinery and land prices for someone to start out alone.
  

Check out the Nebraska Farm Real Estate Market Survey and other recent agriculture news at: http://lancaster.unl.edu/ag/farm-mgt/farmmgt.shtml.