Farmland prices around Minnesota have risen over the past two decades and the Alexandria Echo Press reports that land values are expected to continue to increase.

The paper quotes Steve Taff, an economist with University of Minnesota Extension, who has conducted an annual farmland appraisal since 1992 in coordination with the 100-year study organized by the University of Minnesota. His research finds farmland prices in Minnesota have been rising steadily since 1990, and peaked at a state average of over $3,500 per acre in 2010.

Taff said the combination of high corn prices and low interest rates have driven the value up. He said that if crop prices remain high and interest rates on treasury bills remain low, land prices have the potential to continue to appreciate. But the higher prices mean that fewer farmers will be able to afford to expand. Taff noted that in the past three years about one-half as much farmland was sold compared to preceding years. Because of higher prices, only one percent of Minnesota’s farmland is sold in a given year, leading to 50 percent of the farmland being leased.