The continued rise in farmland prices is part of a major shift in farm economics that even those in the industry are just beginning to recognize: Owners who lease their land to farmers are having to settle for lower returns than they've historically faced, according to Murray Wise, of Murray Wise Associates LLC.

"Farmers and farmland investors are facing a new reality of lower returns on their farmland, and we're beginning to see this both anecdotally and statistically," said Murray Wise, whose firm sells farmland by auction and private treaty.

"We've been enjoying returns of 3.5 to 4.5 percent, but I believe that's changing dramatically," said Wise. "A major factor is that returns on competing investments are so low that farmland will remain an excellent investment even at rates of 3 percent or less, which we're already starting to see."

That doesn't mean that cash rents are falling. In fact, recent statistics prepared by Iowa State University Extension economist William Edwards show that cash rents in Iowa have risen steadily. "In 2006, the average cash rent on Iowa farmland was $133 per acre. Rents rose more than 11 percent in 2011, but the return based on the price of the land dropped from 3.8 percent to 3.4 percent," said Wise.

Does that mean farmland is losing its shine as an investment? Not according to Wise.

"My local bank has been advertising 0.77 percent interest on a seven-month CD, and they're bragging about it. Returns on stocks, bonds and commodities have been so weak and volatile in recent years that investors have fled those assets and moved increasingly into farmland. For the immediate future, I think we'll continue to see farmland prices rise. But as far as income for investors goes, the return on investment will go down," said Wise.