Farmland values in the American Corn Belt have increased significantly since last year, the Federal Reserve Bank of Chicago said earlier this week. The increased value of farmland is part of a larger agricultural trend in the United States.
Across the country, agriculture is a major bright spot in an otherwise struggling economy. Despite hard economic times, agricultural production and trade is up and farm profits and incomes are reaching record highs. In the midst of this crop boom, farmland values have risen dramatically, increasing by 25 percent since last year, the largest increase since the 1970s.
The rising value is concentrated in the Corn Belt, a region stretching across the Midwest where corn has been the predominant crop. Driven by increased demand, corn prices have skyrocketed making the fertile farmland of the Midwest incredibly valuable.
Many farmers are still reeling from the sudden influx of money, with many farmers who had been struggling suddenly reveling in an apparent renaissance of agricultural production. “The year 2011 may go down in the annals of U.S. agriculture as a once-in-a-generation phenomenon,” said officials at the Chicago fed.
While some farmers are worried that the crop boom may lead to a farming bubble, as it did in the 1980s, that could plunge farmers into financial ruin, many economists have downplayed these concerns, emphasizing that with crop prices as high as they are and with farmers burdened with less debt than in the 80s, a crash is significantly unlikely.
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Written by: Justin Ellison / Farm Plus Staff Writer