Illinois farmland prices continue to rise

Our friends at the Illinois Society of Professional Farm Managers and Rural Appraisers have issued their 2007 report.  Basically, farmland prices continue to rise into the first quarter of this year.  Although 1031 exchanges are still a factor,  the greater part of the increase seems to be due to increasing yields of crops selling at higher prices (ethanol subsidies being part of the reason).  Coal mining also seems to be a factor, I guess because landowners can expect to sell rights, or the land itself.   And wind turbines, which as I understand it yield far more than field crops.

Prime quality farmland is selling at $5,000 to $6,000 per acre outside of metropolitan areas, and up to $30,000 on the suburban fringe.  “Recreational” (hunting) land goes for less (this being land not terribly good for farming).

The report points out that 55% of American farmland is owned by people who do not farm it, and “that number is growing.” If I were inclined to join them, I would be concerned by the report’s assertion that “Farmland is a growth stock,” with a graph very reminiscent of a stock chart, showing that farmland values fluctuate, but the long-term trend is sharply up.

There’s lots more and the report is well worth a look by those interested in where our food comes from and what it costs to produce.

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