Hedge Funds Prep the Farmland Bubble

“Three years later, the purchase of farmland both in America and abroad by outside investors has increased-so much so that in February, Thomas Hoenig, the president of the Federal Reserve Bank of Kansas City, warned against the violent possibilities of a farmland bubble, telling the Senate Agriculture Committee that “distortions in financial markets” will catch the U.S. by surprise again. He would know, because he’s seeing it in his backyard: Kansas and Nebraska reported farmland prices 20 percent above the previous year’s levels and are on pace to double values in four years. A study commissioned by the Organization for Economic Cooperation and Development and released in January estimated the amount of private capital currently committed to farmland and agricultural infrastructure at $14 billion. It also estimated that future investments will “dwarf” what’s currently being thrown into land, by two to three times. Further down, the study makes a conservative projection that the amount of capital potentially entering the sector over the next decade will fly past $150 billion.”

Hedge Farm! The Doomsday Food Price Scenario Turning Hedgies into Survivalists | The New York Observer.