FDIC Warns of Possible US Farmland 'Bubble'

CNBC reports:

U.S. farmland could be the next asset bubble at risk for bursting, a leading banking regulator said Monday.

Sheila Bair, chairman of the Federal Deposit Insurance Corp., said it was important to monitor U.S. farmland values for signs of instability like the price bubbles in the housing and stock markets that burst with disastrous consequences for many investors.

Farmland values remain 58 percent above their 2000 levels in inflation-adjusted terms. Investors have been snapping up high-quality land in the Midwest where row crops like corn and soybeans are grown as well as orchards for high-priced nuts and berries along the U.S. West Coast.