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Biofuel demand causes farmland prices to skyrocket

August 15, 2007
A Purdue University survey shows that the average price of bare Indiana farmland has shot up 17 percent to 19 percent since June 2006.

Poor-quality land averaged $2,991 an acre and high-quality averaged $4,407. Transitional land, shifting out of agriculture, rose 4.5 percent, to $9,520.

Most of the increase was driven by higher prices for corn and soybeans, the dominant crops raised in the state. Much of the rising demand came from ethanol and other biofuel plants, said economist Craig Dobbins, an extension farmland economics specialist who conducted the survey.
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