Farmland Values Increasing

While the economy attempts to get back to its pre-2008 footing, U.S. farmland prices are at their highest ever, with no sign of slowing down. According to Bloomberg Businessweek, the average value of farmland reached $2,350 an acre last year, a number the USDA reported last August.

 

Inflated prices of corn and wheat, combined with low interest rates and a high demand for these commodities abroad are causing record highs in farm income. Profitable land investments have piqued the interests of investors, but the primary buyers are still farmers, according to USA Today.

 

"The vast majority of land is being purchased by farmers or people directly connected with agriculture. … Farming has made unprecedented profits the last five years, so they are building up cash reserves. Simultaneously, interest rates have been low, and the stock market has not been that great," explained Terry Kastens, an agricultural economist at Kansas State University.

 

The USDA predicts a 5.9 percent rise in farmland values this year, with the Agriculture Department claiming that farms in 2012 will garner a $91.7 billion net income, the second-highest on record. 



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