If you are expecting high inflation, consider the following:
Article from Des Moines Register: Iowa farmland prices rose nearly 23% in 2007
I smell a bubble. Commodity prices are at all time highs. We're entering a worldwide recession. I put my money on prices going down.
I smell a bubble. Commodity prices are at all time highs. We're entering a worldwide recession. I put my money on prices going down.
Jim Anderson set a Decatur County record after paying $4,000 an acre for a 75-acre farm.
"'It's pretty good ground,' Anderson said Friday after he outbid about 20 other people, including bidders from California, Illinois and northern Iowa. Decatur County typically has the lowest-priced farmland in Iowa, with an average price last year of $1,828 an acre."
"The record-breaking bidding underscored the fact that these are high times down on the farm, where high prices for crops and farmland are sending U.S. agriculture to altitudes never seen before."
"In Iowa and the three other states covered by Farm Credit Services of America, a leading agricultural lender, farmland prices have risen 20 percent or more in the past year, said Kirk Manker, chief appraiser of the bank."
"Iowa State University Extension economist Michael Duffy, who conducts an annual survey of Iowa farmland prices, said he thinks Iowa's farmland market will be strong for at least five years. 'We have seen a fundamental shift in demand for corn due to ethanol production,' Duffy said. 'I don't think this demand will diminish in the near future.'"
"Iowa farmland set a record in 2007 for the fifth year in a row, Duffy's survey showed, rising to an average of $3,908 an acre, 22 percent more than a year ago. It was the largest one-year increase since 1976."
"Murray Wise of a leading Midwestern farm real estate brokerage based in Champaign, Ill., said the Iowa farmland market 'is hotter than most, but Illinois, Indiana and Ohio follow close behind.'"
"'This is a demand-driven market,' Wise said. 'It's only the second one in history.'"
"The first demand market occurred in the early 1970s, when the Soviet Union purchased large quantities of U.S. grains, Wise said. That demand market only lasted about a year. 'It's a different world out there,' Wise said. 'The good times are here for an extended period of time.'"
"One spillover from the housing market downturn, Wise said, is a shift of capital from mortgages to agriculture. 'East Coast lenders are saying they want to go into agriculture,' he said. 'Capital wants a home in U.S. ag.'"