Urban Sprawl Produces Rich Pickings for Farmland Owners

Urban sprawl in the US is sending the value of farmland soaring to record levels as investors pump money into property development or buy land for recreational purposes, according to a study by the Federal Reserve Bank of Kansas City.

The findings, made by the bank’s Center for the Study of Rural America, show that healthy crop receipts in the past two years have led to record highs in net farm income.

That had been “quickly capitalised” into farmland values, further boosted by generous payouts to farmers under the US government’s farm subsidy schemes.

But the rise in farmland values had also been driven by urban residents pushing into areas traditionally used for growing wheat, corn and soyabeans, especially in the Midwest.
Financial Times via MSN Money