Farmland the new hot property

[jpak]

http://www.theglobeandmail.com/servlet/story/LAC.20070221.RCORN21/TPStory/RealEstate

Farmland from Iowa to Argentina is rising faster in price than apartments in Manhattan and London for the first time in 30 years.

Demand for corn used in ethanol increased the value of cropland 16 per cent in Indiana and 35 per cent in Idaho in 2006, government figures show. The price of a Soho loft appreciated only 12 per cent, while a pied-a-terre in Islington near London's financial district gained 11 per cent, according to realtors.

Farmland returns "will take a quantum leap over the next 18 months," after corn prices surged to a 10-year high in February, according to Murray Wise, the 58-year-old chairman and chief executive officer of Westchester Group Inc. in Champaign, Ill., who oversees $460-million (U.S.) of land investments.

Mr. Wise, who was born on a Canadian farm and now manages 85,000 acres, said prices in the U.S. Midwest may gain 12 per cent a year through 2017. Farmland rose in value in 34 of the last 37 years, according to data compiled by UBS AgriVest, a unit of UBS AG, the world's biggest money manager. The returns are attracting hedge funds and investment brokers.

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[Purveyor]

1. Thousands of acres of farmland have been converted to housing

subdivisions here in mid-michigan, now littered with "pressboard McMansions".

Many now are "For Sale" or empty due to the economic depression this state is experiencing.

I have visions of the scene in "Grapes of Wrath", where the banks send in dozers to clear the land and convert it back to farmland.

[phantom power]

2. If we *can* convert it back to farmland, I'll consider us lucky.

[Ezlivin]

4. When it's time to "convert it back" there won't be fuel to run the bulldozers

Here in the DFW area the farm and ranch land is gone. It's all been turned into trendy subdivisions with fancy names and gates. I used to drive up my road and be surrounded by acres of woods and open fields. Now it's all homes, all cookie-cutter architecture McMansions with SUVs parked in the driveway.

I fucking hate it. I never thought I'd miss trailer parks, but they have way more soul.

[murielm99]

3. This isn't exactly news.

Ask any farm family who has to pay taxes. The increasing value of the land makes it difficult.

It is also difficult for anyone to start farming, with prices the way they are. And it is hard to add to existing farms.

Hedge funds and investment brokers? That is old news, too. You would be surprised how many families out here do not own the places they farm. Some banker in Chicago owns it, more than likely. Many of the families here could not farm profitably if they had to pay the taxes themselves.

Yes, corn prices are rising because of the interest in ethanol. It is about time that farmers got decent prices for their corn. Maybe it will last, too.