Since June, grain prices have doubled, and futures markets suggest that prices could remain elevated through 2014. Still, historically low interest rates and capitalization rates are needed to justify current farmland values. Over the past year, farmland values have posted double-digit gains, with additional gains expected in 2011 (Map 1).
By the beginning of 2010, U.S. farmland values had risen more than 15 percent above 2005 levels, lifting the total value of U.S. farmland to almost $ trillion (Chart 1). While farmers own the majority of U.S. farmland, non-farm investors are buying more land. According to a 2010 Iowa State University report, investors accounted for a quarter of Iowa farmland sales.