Iowa land values rise as ethanol breaks production records
December 13, 2006
BY Dave Nilles
The boom in Iowa's ethanol industry may be partially affecting land prices in the state, at least according to information in a recent survey conducted by Iowa State University (ISU).
The average value of an acre of farmland in the state reached an all-time record of $3,204 in 2006, according to an annual land value survey conducted by ISU. The increase is partially attributed to a rise in corn prices and the demand for ethanol.
This is the fourth year in a row with a new record high, said Mike Duffy, an ISU Extension farm economist who conducted the survey. He said the rapid increase can be tied to the increase in grain prices. Corn prices averaged $207 per bushel from January to October 2006, but current cash prices are well over $3 per bushel.
Today the Iowa Renewable Fuels Association announced that Iowa ethanol plants consumed 25 percent of the state's 2005 corn crop. The ethanol facilities consumed more than 550 million bushels of the 2.16 billion bushels produced in Iowa in 2005.
"There was a record demand for ethanol from coast-to-coast this year, and Iowa stepped up to fill the need," said IRFA Executive Director Monte Shaw. "In fact, Iowa ethanol refineries will produce just over 30 percent of the entire 2006 U.S. ethanol production. That's a fine testament to Iowa entrepreneurs, Iowa workers and Iowa corn growers."
Iowa's average land value reached over $3,000 per acre for the first time since ISU started conducting the survey in 1941. Duffy said seven counties topped $4,000 per acre. Scott County, which is along the Mississippi River, reported values at $5,073 per acre.
The survey contacted real estate brokers, farm lenders and others who work with land markets. Forty-two percent of this year's respondents said good grain prices were a major factor in land value increases. Fourteen percent suggested that biofuel demand was at least a partial factor.
The state currently has 25 operational ethanol plants, which five more under construction. Shaw estimated that 12 more projects could begin construction in 2007 adding another 1.4 billion gallons of capacity.
Dave Nilles is Online Editor for Ethanol Producer Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.
Posted: 10:16 a.m. CST Wednesday, December 20, 2006
The average value of an acre of farmland in the state reached an all-time record of $3,204 in 2006, according to an annual land value survey conducted by ISU. The increase is partially attributed to a rise in corn prices and the demand for ethanol.
This is the fourth year in a row with a new record high, said Mike Duffy, an ISU Extension farm economist who conducted the survey. He said the rapid increase can be tied to the increase in grain prices. Corn prices averaged $207 per bushel from January to October 2006, but current cash prices are well over $3 per bushel.
Today the Iowa Renewable Fuels Association announced that Iowa ethanol plants consumed 25 percent of the state's 2005 corn crop. The ethanol facilities consumed more than 550 million bushels of the 2.16 billion bushels produced in Iowa in 2005.
"There was a record demand for ethanol from coast-to-coast this year, and Iowa stepped up to fill the need," said IRFA Executive Director Monte Shaw. "In fact, Iowa ethanol refineries will produce just over 30 percent of the entire 2006 U.S. ethanol production. That's a fine testament to Iowa entrepreneurs, Iowa workers and Iowa corn growers."
Iowa's average land value reached over $3,000 per acre for the first time since ISU started conducting the survey in 1941. Duffy said seven counties topped $4,000 per acre. Scott County, which is along the Mississippi River, reported values at $5,073 per acre.
The survey contacted real estate brokers, farm lenders and others who work with land markets. Forty-two percent of this year's respondents said good grain prices were a major factor in land value increases. Fourteen percent suggested that biofuel demand was at least a partial factor.
The state currently has 25 operational ethanol plants, which five more under construction. Shaw estimated that 12 more projects could begin construction in 2007 adding another 1.4 billion gallons of capacity.
Dave Nilles is Online Editor for Ethanol Producer Magazine. Reach him at dnilles@bbibiofuels.com or (701) 373-0636.
Posted: 10:16 a.m. CST Wednesday, December 20, 2006
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