For taxes payable in 2009, farmland assessments were increased by 15 percent countywide, assessor Doreen Pehrson said. That has put the county’s assessment at an average of 93 percent of actual sales, a safe place to be.

Banks that help finance those land deals also have taken a keen interest in the trend.

Royce Elker directs Agstar Financial Services’ appraisal services. He said the lender follows certain properties over years — even decades — to track land prices. It calls these properties “benchmark” farms.

From July of last year to last month, the average increase for the 12 benchmark farms in the area has risen 15.5 percent, he said. Depending on the land, prices have risen by as much as 25 percent and as little as 10 percent, he said.

And those double-digit increases have continued for two or three years, Elker said.

Those increases haven’t gone unnoticed by the Carlstrom couple, Lee and Jane, who have spent the last few years looking for a place to build a hobby farm near Mankato.

Jane Carlstrom said they were surprised at the cost of cropland alone and were about to “bite the bullet” on such land when they found a better deal.

They hedged against the high cost, in part, by buying a parcel with a house that can be resold.

After pride cometh

Longtime players in this industry remember another time of skyrocketing commodity and land prices, and they don’t reminisce fondly.

“At some point, there’s going to be, in my humble opinion, a turnaround and we have to be ready for that,” said Schoper, the Extension educator. “When the bubble bursts, it’s extremely painful financially for everybody.”

Elker, the Agstar appraiser, was a loan officer in the ’80s and agrees, if somewhat less dramatically: “It wasn’t pleasant.”

But both men agree that the industry is better poised for a recovery today.

Lenders, Schoper said, are requiring farmers to come up with more money themselves. Overreaching purchases should be less prevalent if farmers are required to put more capital up front.

The crash taught lenders a lesson in risk management, Elker said.