"We were getting 200 and 300 percent increases a year the last few years. It's unbelievable," he said, adding that land traditionally has served as a hedge against inflation.
Rising farmland prices also drive up costs for farmers who rent or lease land, as well as the cost of residential and commercial development. Brorsen pointed out higher prices for corn, soybeans, wheat and other basic commodities eventually show up in beef, pork and other supermarket commodities.
"It's kind of a tradeoff. Maybe we get our gas prices in line (with alternative fuels), but our food prices go up," he said.
Even a provision of the federal tax code - the so-called "1031 exchange" - has helped push up farmland prices the last few years, said Carroll Merry, executive director of the farm managers and appraisers society.
He explained a 1031 exchange generally allows investors to defer taxes on property sales, including farmland, if the proceeds are invested in another piece of property within time limits set by the code.
"You have farmland going for $10,000 an acre in one area of the state, then they take the cash and buy land somewhere else in the state," he said.
The farmland price boom that began in the late 1970s was followed by a collapse that began in 1982. Prices fell more than 43 percent from 1982 to 1987.
Farmland investors borrowed more heavily and at higher interest rates in the 1970s and early 1980s, making such a collapse less likely now, according to both reports.
Lattz said the price trend depends heavily on just how many proposed alternative fuel plants are actually built.
"There obviously is increased demand for ethanol, but some of it's a perception that this is going to continue to grow.
"If we continue to build all these plants, we're going to continue to see the demand (for farmland). Whether it all comes to pass, we'll just have to see," he said.
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