Saturday, November 13, 2010

Paging Paul Krugman 3: Farmland Prices Soar

WSJ reports:
Prices for irrigated cropland soared 9.6% in the third quarter across the western swath of the Farm Belt amid booming demand for U.S. crops, according to a survey released Friday by the Federal Reserve Bank of Kansas City.

The quarterly survey of the region known as the 10th District, which covers western Missouri, Nebraska, Kansas, Oklahoma, Wyoming, Colorado and northern New Mexico, found that farmland prices rose for the fourth consecutive quarter since a drop in the third quarter of 2009, which is when the livestock sector was contracting in face of the steep recession.

The value of nonirrigated cropland in the region rose 6.4% compared with the 2009 third quarter, while ranchland values climbed 4.3%.
Will Krugman now fall on his deflation sword, or does he have a chart that proves rising farm prices are actually deflationary?

1 comment:

  1. Whatever evidence you show of rising prices, I think Krugman just blatantly disregards. Raising the prices of HD televisions at Wal-Mart (which he also hates) is apparently more important than letting prices of food and energy fall.