Wednesday, March 31, 2010

Farmland prices rise as few owners look to sell

As fewer farmers look to sell their land, those who do are enjoying a price boom driven by demand. When one farm in Eastern Illinois recently went on the market, the sinking price of corn didn't prevent stiff competition for the mostly tillable, 78-acre parcel with a 180-bushel average corn yield, Katie Micik of DTN reports. "Illinois appraisers estimate sellers listed 30 to 40 percent less land in 2009 than in 2008, and that’s turned what some thought could have been a soft market into a seller’s dream," Micik writes.

Interest in owning farmland is growing, Micik reports, and has even attracted the attention of pension funds and insurance companies like it did in the 1970s. Sixty people showed up for the farm auction Micik observed, and 26 registered to bid. Murry Wise, CEO of Westchester Group, which ran the auction, told Micik, "There’s one trend that’s painfully clear: More people are willing to buy farmland than are willing to sell," and he thinks there’s more capital chasing farmland now than in any year he’s been in the business, which is driving up values nationwide. (Read more)

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