As the housing bubble pops in the United States, and the once booming London housing market has begun to fizzle out, a Bloomberg.com article showed that the place to invest in property is in…Iowa?
“Land in Iowa, the biggest U.S. producer of corn and home to the most ethanol plants, surpassed $5,000 an acre from a high of $4,200 a year ago, said Monty Meusch, 55, a vice president for Farmers national Co., a property broker and farmland manager in Omaha, Nebraska. A 200-acre Iowa farm increased 14 percent in a month when it sold for $5,7000 an acre in October, he said.”
Due to demand for corn-based ethanol, farmland from Iowa to Argentina is rising fast…and commodity gurus couldn’t be happier.
Hedge fund manager and Hot Commodities author, Jim Rogers said that because that the above normal temperatures our county has been seeing will hinder crops and has “advised purchasing farmland for at least a decade.
“‘Because of the disruptions, agricultural prices will go through the roof,’ he told reporters in Melbourne on Feb. 7. ‘ I am extremely bullish on agriculture.'”
In Argentina, the world’s second-largest exporter of corn, the cost of buying a corn farm has jumped 27 percent in the last year – but Chris Mayer, isn’t putting his money on farmland. Chris, who is traveling to Argentina today for a closer look at this story, thinks that the real investment opportunities lie at the back-end of the agricultural boom – with farming equipment.
“All this machinery that does the heavy lifting of planting and harvesting corn – tractors, plows, irrigation equipment – carries the brand names of many companies. This is where the true payday is – not in making the ethanol, but in selling the picks and shovels.”
Markets and Money