Farmlands Case Study

I personally believe my colleagues are giving me successful advice after completing extensive research, although the price per acre will have to be drastically negotiated. The U.S. Department of Agriculture, Illinois has released the annual report that listed Illinois farmland acre price at an average $5,800 in 2011. $4,900 was the price per acre in 2010 that is an increase of nearly 18 percent. It is important to note that my fellow colleagues were correct when they stated that to expect farmland price to nearly double or tripled in the next few years.

The 2011 growth endures a string of huge growth that originated in the year 2004 (see Figure 1). Ever since 2004, the state of Illinois farmland value has grew by nearly 222 percent or, specified otherwise, Illinois farmland values are 2.2 times greater in the year 2011 than in the year 2004. The last seven-year land values have grew/increased in a drastic quantity was from 1975 through 1981. During this time, the state of Illinois farmland grew from $846 per acre in 1975 to a historical $2,188 per acre in 1981, causing farmland values to be 2.6 times greater in 1981 than in 1977.

The United States became the world's largest ethanol fuel manufacturer in the year 2006. It is also important to note that there is a surge of E85 (ethanol fuel blend) gas station throughout the United States of America. Ethanol fuel manufactures has reliable incentives to use ethanol because manufactures obtain a 51 cent per United States gallon funding (manufactures tax credit) from taxpayers. Also, since February 2011, the value of ethanol has remained less than the value of traditional gasoline.

I am very aware that farm equipment can be very pricey but with the additional money I plan to save by reduce my price I pay per acre will help cover the price of the John Deere Combines, Self-Propelled Windrowers, and Headers (estimation for equipment $300,000).