With a historically awful drought laying waste to fields across the country, you might think farmland prices would be down—but you'd be wrong. The average price of farmland in Iowa jumped 24% in the second quarter compared to last year, while in Illinois it rose 15%, according to a new Federal Reserve Bank of Chicago report. Indeed, Iowa's most desirable fields are still selling for more than $10,000 an acre, the Wall Street Journal reports.
"A month ago, I thought there would be a little softening, but that has not been the case," said the head of one land auctioning firm. One reason: Farmers are getting generous payouts from federally subsidized insurance policies. Still, buyers are using some caution, insofar as more are paying in cash. "The tremendous uncertainty for this crop year makes [loans] a very dangerous choice," one farmer said.