US farmland was one of the best investments, but probably not this year (Barron’s)

One of the best investments you could have made in the last decade was the buying of farmland in the corn belt states of America.


In 2002 farmland in Iowa was sold for a paltry $2,083 per acre; in 2011 that could fetch $6,708.

The article of Barron's: "Down -- but Far From Out -- on the Farm" this week reminds to these wonderful times and they think the golden period is over for a not too long time. The subsidies for ethanol from corn will be diminished, they will add less ethanol to gas than what was promised to the farmers. Everybody is now planting like mad men (record selling of seed by Monsanto reason for upward profit warning) to produce corn for China. 1/3 is export and the export is growing, but maybe not this year because the groth in China this year will be very low (only 8%, but I should think that will not be a reason toe at less food). Some people even think that the corn prices can go down (not a certainty, the Chinese want tof eed their pigs and who knows el niño becomes worse than thought). The income of farmers could go down and then there will be less Money left for buying land. The last ten years farm income has exploded and that is why the prices from farm land could explode even more, but with fiscal austerity arriving and some belief in reducing obesitas people think commodity prices will go down.

Another important reason is that the farmers in the corn belt states are now old chaps now (55% is 65+) and they want to sell their land instead of keeping it in the family.

Source charts : Barron’s (Down- but far from out on the farm) and data stream