Everyone Wants Security, As Farmland Prices Go Parabolic

by Dave

Latin America price arbitrage exists in hi-quality farmland – prices ranging from $2000 to $3000 per acre in Uruguay and Paraguay, for ready to farm properties. The problem of feeding Asia exists no matter if the USD and EUR ultimately become worthless over the next 2 decades with massive money printing. Farmland prices will likely skyrocket this decade as people realize the ultimate scam of paper money and rush into assets that “cannot be printed”.
via BusinessInsider

The price of high quality farmland is now generally in the rage of $5,500 – $7,000 per acre in Iowa and $6,200 – $7,500 in Illinois.

“There was a dramatic jump in the last 60 days,” says Loyd Brown, the president of Hertz Farm Management. He says land prices have been rising since 2009, but the biggest increase has occurred in the last 2 months.

Brown sells land to farmers, investors and investment firms.
He noticed there was a steady and significant jump when, in a sequence of three auctions he held, land prices jumped up $500 per acre for top quality land.

Most of the buyers are farmers, around 60%-70% of the market, he says. The rest are investment firms and individuals. “Individual investors usually have a background in farming,” he says. He thinks prices are increasing because of low interest rates, the lack of good alternative investments and because a lot of people want tangible, conservative assets. “A lot of people just like buying something that produces food, fiber and fuel,” he said.

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