Bankers remain, relatively, relaxed about the US farmland market despite a surge in prices which has reheated bubble fears – and may in some states have proven even higher than the surge of up to 41% identified in Nebraska.
Lenders surveyed for Creighton University's respected monthly survey on America's rural economy rated the "bursting of the farmland price bubble" as the second biggest risk to agricultural prosperity.
But, backed by less than one-in-five respondents, it was a distant second to the main threat – falling farm commodity values - and seen as only narrowly more perilous than the third-ranked danger, a change to US policy on the alternative energies that farmers rely on so significantly for crop demand.
"Almost half, 49%, indicated that low agriculture commodity prices posed the greatest peril for their local economies," the university said.
Indeed, Ernie Goss, the Creighton economist who started the survey six years ago, said that demand for farms remained strong, with "farmers and investors once against driving up the price of farmland at a rapid pace", after a slowdown earlier in the year.
A farmland index calculated by the university - in which higher figures, above 50, indicate increasing price growth, and those below 50 show price falls – rose to 75.4 from October's "robust" figure of 66.9.
The findings tallied with data from the Federal Reserve, the US central bank, showing a surge in farmland prices, notably in Iowa, where the value of "good" land surged by more than 30% in the year to the start of last month, and in Nebraska, where irrigated land appreciated by 41%.
"Record gains in the northern Plains were fuelled by another bumper crop this harvest season that raised farm income expectations despite the recent slide in crop prices," the Fed's Kansas City bank said.
The survey by Creighton, which is based in Nebraska, also showed particularly strong gains in its home state, with the index figure, derived from returns from bank chief executives, "rocketing" to 76.3, from 65.3 in the October survey.
However, some states not yet highlighted in Fed research showed even bigger gains, with the figure for Colorado rising to 81.4, for Wyoming to 87.7, and for North Dakota climbing to 93.1.
The extent of the price rises identified in the Fed reports has renewed concerns over the extent of price rises, with many recalling the 1980s' market collapse which followed the boom of the 1970s.
The Farm Credit Administration has voiced "extreme caution" over the extent of the price rises, while the bankers' association in Oklahoma – a state not covered by the Creighton survey – warning that prices "may be skewed some".
"I've seen normal grassland that I would think normally would go for $250-350 per acre selling for around $700 and upwards. For me, it's entirely too high," David Cook, vice-chairman of the Oklahoma Bankers Association, said.