Talk of a farmland price bubble has grown as record-breaking sales have accumulated over the past two years. After Midwest farmland prices stalled out between 2008 and 2009, prices began climbing at an escalating rate, culminating in a two-year increase approaching 50% in some areas.

Iowa farmland values, now pegged at $5,600/acre on average, led the pace with a 24.4% increase over the past year. That’s on top of a 16.9% increase from 2009 to 2010, a two-year price hike of 45%, according to a USDA report on farmland values released in August.

Irrigated Nebraska cropland has been up a similar amount over the two-year period. Irrigated cropland was up 23.8% to $3,900/acre from 2010 to 2011, on top of a 16.6% increase the previous year.

Price increases in other Corn Belt states have been lower, but still up double digits over the past year in many cases. These include Illinois, up 16.3% to $5,700; Indiana, up 11.6% to $4,800; and Minnesota, up 12% to $3,350, according to USDA. Farmland value increases have been more moderate in Michigan, Ohio, Missouri and Wisconsin, where they were up by 5.5 to 8%, to $3,850, $4,300, $2,530 and $4,050, respectively.

The double-digit trend extended into the western Corn Belt, where in addition to Nebraska, Kansas farmland was up 13.6% to $1,250; South Dakota, up 13.4% to $1,100; and North Dakota, up 15.3% to $980.

As in recent years, operating farmers continue to be the major buyers of farmland. Outside investors are showing strong buying interest, too, but are largely being outbid by farmers, Wise notes.

“We are in an area where there are a lot of established farmers who are expanding their operations,” Brock adds. “It’s the same old story; you need more land to stay efficient.”