Surging commodity prices are working wonders for the value of farmland and auctions, Bloomberg reports.
Greene County, Iowa saw 120 acres sell last month for nearly $1 million, which breaks down as $8,200 per acre. That sale price is 44 percent higher than the $5,701 estimate one acre averages in the U.S.
"It's reflective of what we're seeing," Iowa State economist Mike Duffy said of auction results. "There's just not a lot of ground offered for sale."
The Federal Reserve Bank of Kansas City announced on Thursday that farmland values in central U.S. states had a fourth quarter during which they gained the most in more than two years. That is welcome news in a region that has lost scores of manufacturing jobs, which in turn forces homes and property values to plunge.
"In the next year to two years, I don't see a lot right now to indicate that it's going to take a nosedive," Duffy said. "What people have to remember is farmland is primarily bought by farmers and they buy it for the long term."
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