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Higher U.S. farmland values good, bad

Nov. 17, 2008 at 9:03 PM

SOLON, Iowa, Nov. 17 (UPI) -- Fast-rising U.S. farmland prices -- up 9 percent nationwide from a year ago -- are a two-edged sword, those who monitor the industry say.

Farmland values last year were up 21 percent in South Dakota and 18 percent in Iowa, and have nearly doubled in Illinois since 2004 -- providing wealth for current farmers, The Christian Science Monitor noted in a Monday story.

On the downside, some economists and rural advocates say, it means it's just that much harder for young people to get a farm of their own and it furthers the consolidation of farmland ownership.

The rising values put arable tracts "out of reach to all but those who have large farms and/or corporate backing," said Brian Dabson, a professor at the Truman School of Public Affairs at the University of Missouri-Columbia and executive vice president of the Rural Policy Research Institute. "And that's not healthy for a rural economy."

Unlike residential real estate that has been falling in value, economists and land agents don't expect farmland prices to drop much, if at all.

"It's viewed as a very safe investment," says Troy Louwagie, a land consultant in Mount Vernon, Iowa.

Part-time farmer Jarrett Smith of Spencer, Iowa, says it doesn't look like he'll be able to afford to jump in any time soon.

"Right now, I could only dream of getting some ground," Smith said.

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