What’s A Better Investment, Farmland Or Stocks?

Economist Mike Duffy, Iowa State University, recently compared two potential wealth-building choices: farmland versus purchasing shares in the Standard & Poor’s Index, Agri Marketing reports.

Duffy said since 1990 the estimated average value of Iowa farmland has more than tripled from $1214 to $4371 per acre. On the other hand the S&P Index lost 32% of its value from 2000 to 2008, but its climb from 1990 had been impressive with an increase of over 100% from 1990 to 2009. Duffy went back as far as 1960, and with lessons learned, offers some thoughts about the future.

Duffy concluded that depending upon the year when an initial investment was made, farmland might outperform the stock market, and in other years, the stock market would be a better place than a farmland auction to invest your money.

In the future farmland prices will depend on crop income, which is dependent upon many factors, including the recovery of the economy, Duffy said. Just the same, the economic recovery will have a great influence on the value of stocks, if you are considering an investment today. To view the full article go to: extension.iastate.edu/agdm/articles/duffy/DuffyJan10.html.