Friday, October 19, 2012

Iowa Farms Minting Millionaires

Jim Rogers is proving very accurate with his advice to own farmland.

Bloomberg reports:
Farmland auctions in Iowa now resemble a dressed-down spectator sport with Sotheby’s prices, a reflection of the yawning divide that has opened in some of the most bountiful stretches of rural America. Farm earnings in the state and throughout the U.S. increased at eight times the rate of nonfarm wages from 2008 to 2011...

Booming worldwide demand for grain has showered wealth on farmers by tripling Iowa land values in the past decade and setting them up for record profits this year, even in the face of the nation’s worst drought in more than half a century, the U.S. Department of Agriculture projects.
Land that had long produced boxcars full of corn and soybeans is now yielding a new crop: locally grown millionaires...

Iowa’s most recent unemployment rate was 5.5 percent, well short of the national average of 7.8 percent...

Nowhere is the surging value of property more evident than in O’Brien County, Iowa, a perfect square of 24 miles in each direction, tucked near the corner of the South Dakota and Minnesota borders. An acre of O’Brien land in 2011 was valued at $9,513, a 33 percent increase from 2010 and the state’s highest average, according to Iowa State.


  1. but are finding out they have to auction a significant portion to pay estate taxes when the head of the estate dies. This causes considerable family wealth not only to be dispersed to the state but passes the capital to larger producers. I know of few farmers that support subsidies as these have unduly inflated grain prices and actually ends up costing them profits even if at the face their grain sales are higher.

  2. Good luck to the farmers when gas hits $6 gallon, $7..$10..$20...

  3. As a small farmer myself, grain farmers have another come-from-behind bubble ready to burst. If the GMO labeling bills become approved, many farms drowned in RoundUp will be no longer usable for non GM seed for a period of 4-6 years,which would be at a much higher demand (price) causing a long term drop in available grain. The problems here would come at the worst time possible since global food supply is already at a dangerous low.