The great cash crop: Farmland

The great cash crop: Farmland

The rise in farmland prices may be a sign that the U.S. farm economy is pulling out of the sharp recession far more robustly than the general economy. Interest in farmland as an investment is high because economists expect a planting boom next spring.

Interest in farmland as an investment is high because economists expect a planting boom next spring. The rise in farmland prices is another sign that the U.S. farm economy is pulling out of the sharp recession far more robustly than the general economy, which is burdened by a stubbornly high unemployment rate and weak real-estate values. USDA estimates that U.S. net farm income, a rough measure of profitability, is jumping 24 percent this year to $77.1 billion.

The majority of demand for farmland is coming from farmers, but there also is growing interest among nonfarm investors who are looking for hard assets with a higher rate of return, and as a potential hedge against future inflation.

To read more about the incline of farmland prices, please see the WSJ article by Lauren Etter and Scott Kilman.

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