Recently a central Illinois farm sold for $15,375 an acre, setting a new county record and confirming that demand for fertile farmland in the heart of the Corn Belt is still going strong.

According to the Chicago Tribune, the sale of the 173-acre farm in Champaign County, Ill., was sold at an auction earlier this month. The staggering price was even a surprise to experts.  

"This is first time in Champaign County we've seen a sale top $15,000 that didn't have some development component associated with it. This was just a farm," Joe Bubon, executive vice president of Murray Wise Associates, a farm auction and real estate company based in Champaign, told the Chicago Tribune.

Though both farmers and investors big on the land, Bubon said that the highest bidder was a farmer, who has not been identified. Read, “U.S. farmland stays hot, Ill. farm sells for $15K an acre.”  

Indiana farmland values aren’t an anomaly for the Corn Belt. The Global Post reported in an article available here that land prices in Iowa have jumped 24 percent in 2012 and gained 63 percent over the last three years. According to the Federal Reserve Bank of Chicago, “farmland values in Iowa and parts of Indiana, Michigan, Wisconsin and Illinois were up 16 percent since early 2012 - the third largest increase since the late 1970s.”Click here to read more.

Farmland values in the nation’s midsection are used by federal economists as a gauge for farm economy and to determine the health of the banking system.

Reuters reports that the increase in land values has also stirred banker fears about a farmland bubble.

"Farm prices are high, but so are commodity prices and interest rates are very low. Those are the two biggest determinants of what farm ground should sell for," said Phil Burns, chief executive of F&M Bank in West Point, Nebraska. "The question becomes how sustainable are either or both looking longer term? In the short term everything looks fine.

Read more here.

Last year, a report from the American Enterprise Institute for Public Policy Research said that the farmland market is indeed showing similar pattern as those seen in the market bubble of the 1970s and 1980s. Alex J. Pollock, resident fellow at the American Enterprise Institute, believes that “Federal Reserve’s record-low interest rates have contributed to inflation in the market prices of farmland, and he believes when interest rates begin to rise, farmland prices may drop.”

See, “Farmland prices: Boom or bubble?”