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Crop Land Prices Could 'Ripple'

Crop Land Prices Could 'Ripple'
Corn and Marcellus gas bode well for higher land prices.

Penn State Ag Economists Jim Dunn and Lou Moore are betting that land prices will climb higher in 2011. That's the bottom line of their 2011 Northeast Ag Outlook analysis in January's American Agriculturist magazine.

Prospects for $6 corn and $12 soybeans will certainly drive land prices higher, they contend. As crop revenues grow, land prices should follow particularly in areas with highly productive crop land dominated by cash grain farming. Another 5% annual jump seems likely.

A Marcellus gas 'ripple' too?

ROCK-SOLID ASSET: Farmland still is one of the strongest equity investments, despite that its not the most liquid asset.

Many people have own land for hunting camps in Marcellus Shale areas. And some of them are using cash proceeds from those areas to buy more land in areas such as Lancaster County, they note.

As natural gas payments become more significant, Dunn and Moore expect to see more of it. But whether it'll buoy up land prices in Pennsylvania's Northern Tier or New York's Southern Tier and other areas where there's ag activity and shale gas revenue is questionable. Those prices have already adjusted upward for the natural gas revenue potential.

TAGS: Soybeans
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