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Howard Audsley has been driving through Missouri for the past 30 years to assess the value of farmland. Barreling down the flat roads of Saline County on a recent day, he stopped his truck at a 160-acre tract of newly tilled black land. The land sold in February for $10,700 per acre, double what it would have gone for five years ago.

Heading out into the field, Audsley picked up a clod of the dirt that makes this pocket of land some of the priciest in the state.

"This is a very loamy, very productive, but loamy soil," Audsley said. "A high-clay soil will just be like a rock and that's the difference between the ... soils. And the farmers know this and the investors know this. That's why they pay for it what they do."

A Steep Surge In Prices

It's not just the value of Missouri cropland that's rising. Corn Belt farmland prices from Iowa to Illinois and Nebraska to Kansas have been sky-high lately, boosted by $8-a-bushel corn.

The high commodity prices have helped encourage investors like Steve Diggle, who have no connection to farming, to compete for their very own acreage in the Heartland.

"We paid about $3.3 million for [about 650 acres] in Southeast Illinois in 2009," said Diggle, who is the CEO of Singapore-based Vulpes Investment Management. The company handles $250 million of investor money, about 15 percent of which is in farmland.

"This year we sold it at auction and we got $5.1 million," he said, referring to the Illinois farmland. "That's 55 percent higher than we paid. Plus we got two yields — one of 3.5 percent and one of 5 percent. So, you know, as an investment, that's 63 percent over three years. [It] is great and we're extremely happy with it."

Diggle says his firm also purchased a 1,400-acre tract in Illinois two years ago. The company plans to hold on to it to make money through cash rents and land appreciation.

"The value of your land may go up or down. But as long as bond prices remain where they are, it's very hard to see how we'll have a sustained bear market for agriculture," Diggle said. By comparison, he said, the extremely low returns in the bond market are "just so inferior."

A Safer Investment

You don't have to be a billionaire to invest in farmland.

Physics professor Andy Trupin, who lives in Delray Beach, Fla., bought a 155-acre tract of farmland in Lebo, Kan., two years ago because it looked like it would make him more money than gold or the stock market. He also owns another tract that's primarily pastureland.

"Farmland seemed like a much safer vehicle to get an income stream even though ... it's not a high-income stream. At least it's more than you would get on Treasuries at any duration," Trupin said. "And at the same time, [farmland offers] price appreciation or to at least [holds] its value in the event of an inflation period."

The investment has paid off so far, Trupin said. He rented out the land to a local farmer who grows corn, soybeans and wheat. Even the brutal drought failed to knock down the investment.

"Amazingly we managed to get 20 bushels to the acre of corn even though the place was as dry as Las Vegas last year," Trupin said. "I'm willing to let the income from this thing fluctuate. In bad years, it's a slight loss — maybe a couple of thousand on the year — and in good years, you gain up to $10,000 on it."

Trupin found the land online and got help purchasing it by Realty Executives of Kansas City. The company says 90 percent of its new customers are investors like Trupin, and it holds seminars for investors that walk them through the process of evaluating and buying farmland and how to find local farmers to rent the land.

"There's probably a higher percentage now of people who are strictly investors, stock market people, money-market-type investors, and ... they're buying all types of land," said Dale Hermreck, a broker for Realty Executives who says he sold $21 million worth of farmland in Kansas last year.

"We have a lot of outside interest from Texas, Chicago, New York," Hermreck said. "I get calls and inquiries all over the United States."

The Specter Of A Bubble

But to University of Missouri agriculture economist Ron Plain all of this sounds a bit like the housing bubble burst of 2006. He is concerned a similar bubble could be happening in farmland.

"You get several years going up faster than that long-term trend of 6 percent [annual increases] and you're then in a situation where you're sort of due for a correction," Plain said. "And the way you correct is pull those land values down — or 'pop the bubble' ... and so there's concern about that and it's kind of reasonable to worry."

Plain said that with mortgage rates at their lowest in 60 years, it's reasonable to expect the cost of borrowing to go up eventually. And if crop prices retreat from record highs, he said, that means "less income per acre and therefore less ability to pay for farmland."

Should a bubble burst, farmland might be harder to sell, especially compared with other more liquid investments. But investors argue that any bubble is still far off, and they believe that farm acreage will remain a solid long-term investment so long as the demand for food continues to grow.

It remains to be seen whether investors will be able to compete with farmers for the small supply of high-quality cropland available in the Midwest, says broker Hermreck.

"I have people call me all the time and I just don't have what they're looking for," Hermreck said. "Simply supply and demand. It's just not there. I could sell an awful lot more of this land if it was available. And people seem to hang on to something that's making some money and real popular. It's just real popular now to own land."

Abbie Fentress Swanson reports from Missouri for Harvest Public Media, an agriculture-reporting project involving six NPR member stations in the Midwest. For more stories about farm and food, check out harvestpublicmedia.org.

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