Economic Potential for Converting Woodland and Pasture to Cropland: Lower Mississippi Valley and Southeast

If there were a future need for it, 49 million acres of woodland and pasture in the lower Mississippi Valley and the Southeast could be profitably converted to cropland. Minimum crop prices that would be required to pay for the land conversion (as well as ordinary production costs) are given. The supply of potential cropland would largely depend on the repayment time for the investment in land clearing. Interest charges of 5, 7, and 9 percent would have only a small effect on minimum prices, which would increase about 3.5 percent for each 1-point increase in interest rates. But minimum prices would increase to 155 percent of their original levels if the repayment time were shortened from infinity to 5 years. This increase would make land conversion less profitable. The estimates in the report do not consider the effects on the market for crops, which could be drastic if no adjustments were made in the production of these crops in other areas