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Abstract
Farm real estate in the Midwest has increased in value at rates not seen since the 1970s. The combination of low interest rates, an increase in the demand for grains, and lower stocks has all pushed prices higher for commodities grown on farmland. A question that naturally arises is whether or not there is speculation in farm real estate and if so, to what extent speculation has contributed to the increase in farmland values? In this paper, we develop a valuation model for farmland. Current conditions indicate there may be a modest speculative component, but higher corn prices would be necessary for speculation to be significant.