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National & World Ag News Headlines |
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USA Today: Farmland More Valuable Than Ever
USAgNet - 09/16/2009
As home prices continue to slide nationwide, the value of farmland is setting records. According to an article by the USA Today, 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.
Meanwhile, the demand for ethanol has gotten much of the credit for increasing land prices. But experts point to other factors, including the low value of the dollar, which makes U.S. exports relatively cheap.
Economists predict that farmland will appreciate 6% to 12% annually over the next three years, on top of average annual farm income of 4% to 5%.
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