Topping Out?

 Des Moines Register:

Iowa farmland values are beginning to show signs of softening, a new report Thursday showed, fueling concerns that the air is seeping out of the state’s rapidly rising farmland prices.
Iowa cropland values were mostly flat over the past six months, pushing just 1.2 percent higher, according to the Iowa Chapter of the Realtors Land Institute.
Still, Iowa cropland values posted a healthy 10.6 percent average increase in the last year, driven by large gains in the first half of the year, the report showed.
“Are we going to see the bubble burst? No,” said Kyle Hansen, a real estate agent at Hertz Farm Management in Nevada, Ia. More likely, he said, “we’ll see prices slowly deflate. ... It’s not dropping overnight.”
Cropland values increased 18.5 percent in 2012 and 32.6 percent in 2011, according to the group’s reports.
The sluggish growth over the past six months was driven primarily by lower prices for corn and soybeans, rising interest rates and a challenging growing year, the group said. “We’ve lost $2 (a bushel) in the corn market since the beginning of the year,” said Hansen, the group’s president.....
A report from Rabobank AgriFinance, a St. Louis financial services group, said land values could decline 15 to 20 percent over the next three years in the central United States, because of the region’s high dependence on crops like corn and soybeans.
“Corn led the ramp-up in commodity prices and the associated increase in ag land values,” the group said. “As such, if corn were to fall below $4.50 per bushel for an extended period of time, a significant decrease in land values could follow.”

Things may get interesting (read: painful) in the next few years.  I don't expect the funds to be nearly as interested in throwing money at commodities like they were since 2007.  Right now, I think the ethanol mandate is the main thing holding up corn prices right now.