CHICAGO (WTAQ) - The value of farmland continues to soar in Wisconsin and the Upper Midwest.
The Federal Reserve Bank of Chicago said farmland values in the Badger State jumped by 11 percent last year, with some land selling for over $10,000 an acre.
In neighboring Iowa, farm property has been sold for $20,000 per acre. And in the Federal Reserve’s five-state region, total farmland prices jumped 16 percent in 2012, after a 22 percent jump the preceding year – the largest since the mid-1970’s.
Real estate broker Bryce Hansen says there’s been an increasing number of Wisconsin farmers selling cash crops on the market, rather than using them for livestock feed. A lot of it has been fueled by the demand for corn-based ethanol.
Nationally, farmers expect to plant the most corn since 1936 – over 97 million acres. Wisconsin farmers expect to grow about the same amount of corn as last year, almost 4.5 million acres.
Meanwhile, there are concerns about a so-called “farmland bubble” – in which land values could drop if the federal government eases back from raising the amount of ethanol in gasoline.
Farmland also took a big hit in the 1980’s – but Indiana futures’ trader Alex Breitinger says farmers are carrying less debt today, due to high incomes from record commodity prices. He says more of today’s land price increases are fueled by cash, instead of credit.