As the numbers come in for 2007, it looks like land values for farms in Iowa will set a new record. The average acre of farmland in Iowa increased 22% in value over the past year alone ($705) to reach a new average high of $3,908, according to Iowa State University extension economist Michael Duffy. Although it still isn't as high as the price adjusted for inflation from 1979, the increase is substantial. Duffy attributes the 1979 farm price increase to a surge in demand for grains and soybeans from the Soviet Union and points out that a similar phenomenon is occurring today. The increase in demand for ethanol along with a surge in demand from China has made this fertile land all that more desirable. While increased assessed land prices will surely mean higher taxes for the individual farmers along with rent prices, it has caused the net worth of farmers from across the Midwest to increase dramatically. Duffy adds that although areas such as rural Illinois have seen land investors come in, the most recent trend is for local farmers to reinvest this new net worth in more land to expand their operations and keep a majority of the farmland locally owned. Let's keep it that way.
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2 comments:
Here in eastern Tennessee I have seen so much good farmland lost to housing developments. And although I know the rising property values can be kind of a double edged sword because of property taxes, but it is good to see farmland more valuable as farmland and not subdivisions.
Hey Dave,
Earlier today I was speaking with Rex, Kay,and Kevin about land prices. Your comments are spot-on. Did you attend the Lt. Gov's speech about bio-fuels at ISU? Also, I heard some news blip about enzymes and ethanol at a Cedar Rapids site. Not sure what though. One more thing: I see you are still focused on railroads. Let's pool our money and start a Midwest Shinkansen Service. You're right,though; rails and ethanol seem to make a match. stay warm in this big chill
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