Farmland Has Biggest 1-Year Value Jump Since 1980
November 17th, 2011Via: Denver Post:
The average value of farmland in several Midwestern and Western states grew 25 percent over the past year in the biggest one-year jump in at least three decades.
The increase reported Tuesday by the Federal Reserve Bank of Kansas City, Mo., reflects current low interest rates and a healthy farm economy. But the higher land values will make farming more expensive.
“It makes it difficult for early farmers or farmers who want to expand their operation,” Nebraska Farm Bureau President Keith Olsen said. “The other big concern is that as ag values go up, property taxes are going up.”
Land values increased despite widespread flooding and drought that many farmers in the region struggled with this year. Several hundred thousand acres of farmland along the Missouri River spent much of the summer under water because of flooding, and southern Plains states have been battling severe drought.
But as long as the weather in their area cooperated, farmers did well. Corn prices hit a record high of $7.99 a bushel in June because thin supplies prompted fears of a shortage. Wheat prices also have been high, and some farmers have used the extra income to buy land.
“If you had the moisture to raise a crop, it’s going to be a good year,” said Ron Meyer, who farms near Superior in southeast Nebraska.
But Meyer said the higher land prices will definitely make it harder for young people to get into farming.
Related: Hedge Farm: The Doomsday Food Price Scenario Turning Hedge Fund Managers Into Survivalists
