There’s a reason that a loaf of whole wheat bread is about what it costs for a compact car. Farmland prices were up 14 percent in 2006. Now figures are in for 2007 and guess what? Post another 23 percent rise in farmland values.
Oh, praise be the Energy Bill that slathers subsidies to corporate farmers growing corn! It’s amazing how swiftly Congress can act when it’s politically advantageous to do so. Ethanol is not the answer to our longterm energy needs, especially when some estimates say it costs a gallon of gas to produce a gallon of ethanol. As this post on Oilism.com says, not much of green or sustainable energy sources are green.
Good thing we’re in Iraq, protecting “our” oil supplies!
Anyway, USA Today reported that the average farmland valuation has doubled since 2000:
Demand for grain for food, fuel and export, along with low interest rates and a weakened dollar have raised farmland prices by double digits the past two years. Average values have doubled since 2000.
Farm real estate prices rose 20% to 23% in Iowa, Nebraska, South Dakota and Wyoming in 2007, according to Farm Credit Services of America, an agricultural lender.
The Federal Reserve Bank of Chicago reports that prices rose 15% for the first three quarters of 2007 in its district, which includes Iowa and parts of Illinois, Indiana, Wisconsin and Michigan. That’s on top of a 14% increase nationwide in 2006 — to a record average of $2,160 an acre — the U.S. Department of Agriculture says. Figures for 2007 will come out in summer.
The growth has attracted “a tidal wave of investors,” says Murray Wise of Illinois’ Westchester Group, which manages $500 million in client assets. “It’s everybody from the person concerned about the stock market to large government and corporate pension funds, insurance companies, hedge funds.”
2 Comments
April 5, 2008 at 2:26 am
I enjoyed reading your article.
Not only has farmland increased in value due to the ethanol craze, but it has increased because the population is at a all time high and other evolving countries are beginning to consume more food than ever before. Speculation in the commodities markets will continue to drive farmland prices higher and higher.
June 18, 2008 at 4:24 am
Another thing to consider is that long time farmers often struggle to survive their entire lives. But while they are living, the population and nearby towns are growing. Soon that land becomes 10 times more valuable as residential land. Farmers sell and become instant millionairs. The US is growing and land everywhere is only going up..