[Fishhead24]

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I believe that much of the increase in Iowa farmland per acre price over the recent past is due to the ever expanding Chicago market. Tens of thousands of acres of farmland in suburban Chicago has been turned into subdivisions. These farmers were not yet ready to retire, but they wanted to stay in the midwest. Hello Iowa.



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What you are referring to is "urban sprawl" and it certainly does have an impact on rural farmland prices as prime farmland is taken away by this occurrance.

However, in the grand scheme of things it is only one of many factors pushing the rural land market, and believe it to be be far less than a few other factors which consist of but not limited to the following........

1. Commodity prices of wheat, corn, and soybeans
2. Increased consumption for corn ethanol
3. High oil prices
4. Unstable climate in stock market
5. Low interest rates(although the majority of farmland is being paid by cash these days).
6. 1031 tax exchange laws
7. Highly favorable government farm bills

Couple these factors with your "urban sprawl" perception and one can see the reasoning for the current bullish market in this real estate sector.