New study links ethanol to higher farmland values

A new study from South Dakota State University found that the expansion of the U.S. ethanol industry significantly increased farmland values across the Midwest.  

Researchers found that farmland values in ethanol-producing regions rose by as much as 44% following the implementation of renewable fuel policies and increased corn demand. Higher corn prices, driven by the Renewable Fuel Standard and rising oil prices in the early 2000s, boosted farm revenues and increased competition for productive farmland.  

These findings may be of particular interest to producers, given recent news that the House passed the Nationwide Consumer and Fuel Retailer Choice Act, which allows year-round production of a 15% ethanol blend, up from the current 10%. The bill now moves to the Senate.