Why farmland is not an easy investment

Farmland prices in the US have been steadily increasing over the past five years. The average cost of an acre of farmland in the US is $2,350 compared with $2,010 in 2007, although that varies considerably by region. In Champaign, Illinois, and the corn belt, land value is rocketing. One acre of farmland in the corn belt commands $4,590 compared with $3,290 in 2007, and is up 15.9% on last years’ prices. Is it a bubble? The US Department of Agriculture’s chief economist, Joseph Glauber, thinks not. “There are solid fundamentals in that farm income is growing and interest rates are low. If that stops, land prices will flatten out.”