The cost of farmland in the US has soared in value by more than 1,200% since 2000, according to the National Council of Real Estate Investment Fiduciaries (NCREIF), netting outstanding profits for farmland investors.

More recently, some areas of farmland in the US ‘grain belt’ have doubled in value over the past five years as the price of commodities continues to rise. The US Department of Agriculture experts argue that these values are not sustainable; however, the rising global population and growing need for food may change how farmland is valued at a fundamental level.

Price rises are still in full swing and the Federal Reserve Bank of Chicago just reported that prime farmland prices in the heart of the US grain belt (Indiana, Illinois, Iowa, Michigan and Wisconsin) - were up 17% in the second quarter of 2011, compared to Q2 2010, the biggest year-over-year increase since 1977.

What’s more, negative quarterly returns for farmland are extremely rare. Only once since 1992 has the value of farmland fallen and that came in the fourth quarter of 2001 amid post-9/11 economic turmoil.