Outward Migration of People
At a recent agrilending conference I was asked if the recent energy prices would end the outward migration of people to rural areas from large metropolises.
The answer is no in most cases. To a certain degree, when gas prices are below $3, the benefits of living in rural areas outpaced the drawbacks of energy costs. In many cases, the cost of homes, real estate taxes and cost of living more than overcomes the economics of travel.
Some innovative companies are allowing their employees to telecommute, or work from home one or two days per week. This aspect is becoming popular for the younger generation and the boomers and veterans who are bridging, i.e. slowly retiring. These people will demand and expect flexibility in the workplace.
So, while high fuel prices may slow this trend in the short run, in the long run small rural towns outside of metropolises will be bedroom communities or actual workplaces for this generation of the workforce.
Many traditional producers near retirement are using this trend of increasing land values due to development to prop up their balance sheet despite losing money on the income statement. While acceptable in the short term, the strategy can be devastating to the long-term wealth management strategy.
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Editors' note: Dave Kohl, The Corn and Soybean Digest Trends Editor, is an ag economist specializing in business management and ag finance. He recently retired from Virginia Tech, but continues to conduct applied research and travel extensively in the U.S. and Canada, teaching ag and banking seminars and speaking to producer and agribusiness groups.
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