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News from Global AgInvesting 2011: U.S. Farmland Values to Rise as Food Demand Gains (5.3.2011)
by Debarati Roy

May 3 (Bloomberg) -- Farmland values in the U.S, the world’s biggest exporter of corn and soybeans, will continue to rise as global food demand increases, said Paul Joerger, a vice president at Farmers National Company.

Concern that rising values are in a bubble are “wrong” as supply of land is limited, Joerger, who helps manage 2.3 million acres of farmland, said today at a conference in New York.

Surging grain and livestock prices have sparked demand for rural properties, Jason Henderson, a Federal Reserve Bank of Kansas City economist, said last month. In the fourth quarter, values jumped 14.8 percent for irrigated cropland in parts of the seven states in the Kansas City Fed region from a year earlier. Corn futures in Chicago have rallied 95 percent in the past 12 months.

“This year we will see prices of corn-growing regions surge as we keep losing the crop to bad weather every single day,” Joerger said.

Farm income may rise 20 percent to a record $94.7 billion this year, the USDA said in February.

“Investing in farmland is still an opportunity,” Jeffrey Conrad, the president at Hancock Agricultural Investment Group, said at the New York conference. “The returns from land continue to remain positive.”


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--Editors: Millie Munshi, Patrick McKiernan

To contact the reporter on this story:
Debarati Roy in New York at +1-212-617-5307 or
droy5@bloomberg.net

To contact the editor responsible for this story:
Steve Stroth at +1-312-443-5931 or
sstroth@bloomberg.net.
 

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