DEKALB, Ill., Aug. 8 (UPI) -- Interest in corn-based ethanol is driving up farmland prices in states including Iowa, Nebraska and Illinois, where farmland sells for $5,000 an acre.
The $5,000 average in Illinois is a vast increase from $3,000 in 2002, The New York Times reported Wednesday. An 80-acre DeKalb, Ill., corn and soybean farm recently sold for $10,000 an acre at an auction. It was purchased for $32,000 in 1962.
Jason Henderson, an economist at the Federal Reserve Bank in Kansas City, Neb., said land values in his state rose 17 percent in the first quarter of this year over the same time last year.
“Right now, a lot are still betting that corn-based ethanol will be around a while,” said Michael Duffy, a farm economist at Iowa State University.
However, some in the farm industry say the rising price of land is damaging to farmers.
Paul Burrs, who farms about 400 acres near Dixon, Ill., said he bids constantly on farmland but regularly loses to higher bidders.
“It’s extremely frustrating,” he said. “I crunch the numbers and go as high as I can. But then that’s it. There’s nothing more I can do.”