Farm Progress

Farmland boom carries threat of collapse

If the price of corn falls — and many forecasters predict it will, particularly if the ethanol boom wanes — the price of U.S. farmland will fall with it.

March 20, 2013

1 Min Read

Across the American heartland, farmland prices are soaring. In places like Waco, Neb., and Chickasaw County, Iowa, where the boom-and-bust cycle of farming reaches deep into the psyche, some families are selling the land that they have worked for generations, to cash in while they can.

Behind the rush is the age-old driver of farm booms: high crop prices. Corn, in particular, has been soaring, reflecting demand overseas and, domestically, for ethanol. High prices mean good profits for farmers, and many are using their growing incomes to bid for land. Sensing opportunity, investment firms are buying, too.

 

Want access to the very latest in agriculture news each day? Sign up for the Western Farm Press Daily e-mail newsletter.

 

But if the price of corn falls — and many forecasters predict it will, particularly if the ethanol boom wanes — the price of farmland will fall with it. While many farmers have borrowed little money or used cash to finance their purchases, those who have overexpanded could run into trouble, leaving banks and other creditors with their bad debts.

For more, see: As Crop Prices Surge, Investment Firms and Farmers Vie for Land

More from Western Farm Press

Outcry grows over feral hog damage across US

Is a fearless female leader what U.S. agriculture needs?

Photos: U.S. agriculture hopeful in 2013

Subscribe to receive top agriculture news
Be informed daily with these free e-newsletters

You May Also Like