GREGORY HOENIG/WTE Auctioneer Duane McClain works the crowd in an auction in Pine Bluffs in which eight parcels of land were sold Tuesday.

rep2@wyomingnews.com

armland prices are on the rise.

The demand for ethanol is increasing land costs in Iowa as farmers increase their corn crops. Wyoming's farmers and ranchers also are growing their properties, but not for alternative fuels, said John Childers, a broker with Agri Affiliates.

The real-estate service covers Wyoming's eastern corner, the Nebraska panhandle and northern Colorado. Childers said buyers in these areas are predominately local agriculture producers looking to expand the businesses they already have, not energy corporations eager to move into the Rocky Mountain region.

But this doesn't mean that price pressure in other parts of the country won't affect the Wyoming marketplace. Childers said for the past three to four years, he has seen land parcel price tags edging a little higher each year.

Agri Affiliates hosted a land auction in Pine Bluffs on Tuesday, where eight parcels of land totaling 1,745 acres sold for more than $1 million.

This is a volatile business, though.

A piece of land is only worth as much as someone else is willing to pay. The parcel with the highest price went for $1,453 an acre. Meanwhile the larger parcel directly next door sold for $460 an acre. But both parcels still exceeded the minimum bid requirements of $669 and $317 per acre, respectively.

Childers said all of the winning bidders were ag producers in the Pine Bluffs area.

John Stratman, a real-estate broker with Mason and Morse Ranch Company, said he shows ranch and farmland in southeast Wyoming and western Nebraska to a mix of buyers.

Some customers are looking for an investment property, while other buyers want a site for recreation.

But the biggest impact is from agriculture.

He said there is more interest from investors dealing in ethanol production. This alcohol-based alternative fuel is produced when starch crops like corn are fermented and distilled into simple sugars.

The U.S. Department of Agriculture reported that the nation's farmers intend to plant 15 percent more corn acres in 2007, an increase of 12.1 million acres over the 2006 total.

"It's been a big impact on farmland prices," he said. "There has been considerable demand. The market is definitely stronger this year than last year."

Jerry Burnett, farm and ranch specialist for The Property Exchange in Cheyenne, said land sales specifically for corn crops occur more often in states like Nebraska, Iowa and Illinois. The short number of growing days in Wyoming doesn't make it the ideal location for corn.

"I can't say that there is a big land grab," Burnett added.

Stratman said short-season or dry-land corn can grow in Wyoming or Montana. Sites near Pine Bluffs, Wheatland and Torrington are already growing these crops.

Childers said Wyoming corn crops are more likely to go toward animal feed than energy production. There just aren't enough total bushels produced in the state to fuel an ethanol plant.

Corn isn't a large crop for Wyoming, and the alternative fuel trend probably won't change that, he added.

Iowa farmers aim to plant nearly 14 million acres of corn in 2007. By comparison, Wyoming farmers are expected to plant 90,000 corn acres this year. More of the Cowboy State's acreage is devoted to wheat and hay.

Childers said instead of looking for new sites to grow corn, many farmers are simply converting soybean fields to meet the demand for ethanol. The USDA reported that this year's soybean crops will drop by 11 percent or 8.4 million acres.

But soybeans are another source of biodiesel fuels.

The Cheyenne-based plant, Blue Sky Biodiesel, uses soybean oil to produce millions of gallons of fuel. Since this also isn't a Wyoming crop, oil is trucked in from eastern Nebraska or South Dakota, said plant manager Dustin Grant.