South American crop consultant Dr. Michael Cordonnier says strong commodity prices in Brazil and speculative buying are leading to soaring land prices -- in some instances higher than in the U.S. Midwest.
According to the Parana Department of Rural Economy (Deral), land prices in Parana rose an estimated 20% in 2011. In western Parana in the municipalities of Cascavel and Maringa, top quality land sold in 2011 for as much as R$30,000 per hectare (approximately US$6,666 per acre) with the average selling price in 2011 of R$25,000 per hectare (approximately US$5,555 per acre). Deral officials indicated that land prices in Parana generally rise or fall in direct proportion to the price of grain, especially soybeans.
Dr. Cordonnier says top land values are being seen in Sao Paulo, where premium land near the town of Limeira sold for R$41,000 (approximately US$ 9,111 per acre). “At these prices, the land in southern Brazil has now become some of the most expensive farmland in the world and more expensive than many areas in the Corn Belt of the United States,” he adds.
