The price of corn has increased by 40% over the past 3 years. The increase in production of biofuels since 2005 has required approximately 16 million acres of corn (about the size of Illinois). Likewise export of American soybeans (the crop usually rotated with corn on the megafarms) to China has gone from essentially zero 15 years ago, to over 1/3 of all U.S. production today. The amount of land dedicated to growing soybeans for China is the size of Indiana.
More and more land is being converted to corn/soybean production–over 100 million acres worldwide in the last 7 years.
As the income from corn-farming has skyrocketed, so have the prices of farmland. Since 2010 farmland prices in the “Corn Belt” have increased by over 50%. Since 2001 the increase is close to 200%.
This kind of increase is unsustainable, of course. It is a classic asset bubble, fueled in large part by artificially low interest rates, price manipulation via government subsidies, and depreciation of the currency.
This is largely happening under the radar. Americans generally are unaware of the consequences of agricultural policies designed to benefit the large corporate agribusinesses.
This madness will come to a crashing halt at some point. The bubble will burst, as asset bubbles always do. And ultimately we’ll all have to pony up the cost of cleaning up the mess.