Ethanol boom drives farmers’ land value up

An article in the Wall Street Journal today (p. B6, subscription required) focuses on the sharp spike in Midwest farmland prices resulting from the ethanol boom.

In the past year, cropland prices have climbed by double -digit percentages in many parts of the Heartland, as growers looking to cash in on $4-a-bushel prices for corn–up from about $2 a year ago–have scrambled to add arable acreage.

While established farmers make up the bulk of the buyers, those higher prices for land, added to the higher prices for corn,  are likely to push up consumers’ food costs, already hit by farmers’ shift from food to fuel.  (See earlier post on this.)