LandReport.com » Iowa land

Farmland: Eye on Iowa

Land Report Editors — Mon, 18 Apr 2011 07:00:30 +0000

When Warren Buffett talks up farmland, it’s time we all took a look. Buffett made the following statement last month while being interviewed by Becky Quick on CNBC’s Squawk Box.

“If you took all the gold in the world, it would make a 67-foot cube. It would be worth about $7 trillion, about a third of the value of all the stocks in the U.S. So you can own gold, which can do nothing, or stocks. You could also have farmland. If you gave me the choice, between all the farmland in the country, stocks like Exxon Mobil, or gold, I’d choose the stocks and the farmland.”

— Warren Buffett
CNBC Squawk Box
March 2, 2011

Iowa by the numbers:
92: Millions of acres of corn planted in 2011, the second largest crop since World War Two
35%: Estimated amount of 2011 corn crop used for ethanol
$1.04: Growth of $1 invested in S&P 500 since 2000
$2.72: Growth of $1 invested in Iowa farmland in 2000

You only have to look at the change in Iowa farmland values between 2000 and 2010 to see how it compares to the S&P 500.

Source: Chicago Federal Reserve Bank

Indiana Farmland Skyrockets in Q4A combination of global and regional factors, including increased demand...
Market Watch: Chicago Fed Cites Surge in Midwest Land PricesAgricultural land values in the Seventh Federal Reserve District jumped 12%...

Iowa Farmland Moves Up 13%

Eric OKeefe — Tue, 18 Jan 2011 07:00:49 +0000

The Chicago Fed reports that farmland values rose 10% in the Seventh Federal Reserve District, which covers all of Iowa, the southern two-thirds of Wisconsin, the northern half of Illinois, the northern two-thirds of Indiana and the southern three-fourths of Michigan. The biggest year-over-year increase was registered in Iowa, where values were up 13% versus 2009, due in part to the limited supply of top-tier property and strong demand for American crops.

No related posts.

Corn Drives Land Prices Higher and Higher

Eric OKeefe — Mon, 01 Oct 2007 19:48:12 +0000

It’s official. The New York Times proclaimed in August that the market for Midwestern farmland was “hot,” a declaration akin to labeling Hurricane Katrina “dangerous” two weeks after it devastated the Gulf Coast. Anyone remotely familiar with the Corn Belt knows that rural land prices have skyrocketed for several years. Here’s a rundown of some recent figures.

BY ERIC O’KEEFE

The amount of corn used for ethanol production has increased fourfold since 2000 from 600 million bushels to more than 2.4 billion bushels in 2006.

FACT: 16.5% Increase in average price of an acre of land in Iowa

In Iowa, the average price of an acre surged 16.5 percent to $4,313 for the year ending March 1, according to the Realtors Land Institute (RLI). The USDA reports Missouri farm values up more than 15 percent to $2,280 per acre. Even recreational land prices surged: 12 to 13 percent in Illinois, according to the Illinois Society of Farm Managers and Rural Appraisers. And the fuel propelling these increases? Government subsidies for corn ethanol.

The amount of corn used for ethanol production has soared fourfold since 2000 from 600 million bushels to more than 2.4 billion bushels in 2006 (more than 20 percent of the U.S. corn crop). According to the USDA, that number will increase more than 40 percent in 2007 when an estimated 3.4 billion bushels are used. In addition to keeping corn prices at near-record highs, this trend has led to a decrease in the number of acres planted in soybean and cotton, the conversion of Conservation Reserve Program acres back to cropland, and even farmers in nontraditional corn states converting crops to corn.

Broker Randy Hertz has been monitoring this price surge from the eye of the storm: rural Iowa. The president of Hertz Real Estate Services and the 2006 national president of the RLI, Hertz labels this phenomenon “ethanol euphoria.” He also offers some advice to those unfamiliar with the driving force behind these production numbers: “Never underestimate the ability of the American farmer to produce corn when the price is high.”

No related posts.