Tuesday, August 12, 2008

Real Estate Boom Continues for U.S. Farms

Average Farm Real Estate Value





Maps are from the USDA's National Agricultural Statistics Service. The average farm real estate value has increased by 85% in the last five years, from $1,270 per acre in 2003 to $2,350 in 2008 (see top chart above, click to enlarge). Many Midwest corn and grain states like the Dakotas, Minnesota, Illinois, Indiana and Nebrask have experience double-digit increases in farm values in just the last year (see bottom chart above, click to enlarge).

Strong commodity prices and farm programs, outside investments, favorable interest rates, and tax incentives
continue to be the factors that drive farm real estate values to record levels.

Update: With farm real estate values booming, commodity farm prices close to historical highs, and farm profits at record levels (see chart below), this group still needs farm subsidies (e.g. $288 billion 2008 farm bill).


6 Comments:

At 8/12/2008 11:02 PM, Blogger bobble said...

its amazing, that's for sure.

a $300,000,000,000 taxpayer funded farm subsidy.

ethanol mandates and tariffs.

let's hear it for government interference! woo hoo!

 
At 8/13/2008 2:18 AM, Anonymous bob wright said...

bobble,

What's a few billion between friends?

 
At 8/13/2008 9:48 AM, Anonymous Anonymous said...

John Deere fell of the tractor today, the commodities boom is over. Now the banks and over leveraged farmers are going to get kicked down a flight of stairs.

 
At 8/13/2008 12:18 PM, Blogger spencer said...

In a competitive market farmland will always rise to the point were it becomes unprofitable for the marginal farmer.

 
At 8/14/2008 5:02 AM, Blogger OBloodyHell said...

> What's a few billion between friends?

A billion here, a billion there, sooner or later it adds up to real money.
- Everett Dirksen -

 
At 8/14/2008 5:06 AM, Blogger OBloodyHell said...

> In a competitive market farmland will always rise to the point were it becomes unprofitable for the marginal farmer.

They're ALL marginal farmers.

The reason the small family farm went the way of the dino is because the profit margins on farms all became far too narrow to handle it with the shoebox accounting techniques of the pre-1960s farmers, and close to impossible to handle it with the financial smoothing ability of anything less than a multimillion dollar company.

Any small family farms that remain are getting by on small-high ticket items like ginseng and "organically grown" crap.

 

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