The price of cropland all over the world is rising more quickly than many urban areas for the first time in 30 years.
High commodity prices, including a rising demand for corn for ethanol production, have caused the value of crop land to climb 16% in Indiana, compared to a 12% appreciation for an apartment in Soho, London.
Murray Wise, chairman and CEO of Champaign, Illinois' Westchester Group Inc., told Bloomberg that farmland returns "will take a quantum leap over the next 18 months,'' after corn prices surged to a 10-year high in February.
According to UBSAgriVest data, U.S. farmland value rose 34 of the last 37 years, and average U.S. farm prices rose 15% in 2006. Wise says prices in the Midwest may gain 12% annually through 2017.
The trend is present overseas as well. In Australia's biggest cattle-grazing state, land rose around 10%. In Argentina, the price of corn farms spiked by 27% in 2006.