Prosperous China

"You can see what a more prosperous China will consume," Diggle, 47, said. "It means more dairy, more meat - not just pork and chicken."

Investors find in farmland a respite from the cyclical price swings of the commodities market. Since 1970, there have been at least four price jumps of at least 100 percent that were followed by steep declines in the S&P agriculture commodities index. By contrast, the average value of an acre of farmland tracked by the US Department of Agriculture has been on a mostly steady climb from $737 in 1980 to $2,350 in 2011.

By about 2006, Vieth's concerns about the economy were mounting. Inflation was at a low, and the dollar had peaked as US debt and deficits soared. So he searched for an asset class that would benefit from a currency decline and rising prices. His research led him to farms, since a falling dollar boosts US crop exports.

As the dollar fell 24 percent against the euro from January 2006 through May 2008, Vieth started buying land as personal investments until the business grew too big for Vieth to manage during evenings and weekends. So, in late 2007, he founded Ceres.

"I was more convinced hard assets were where you wanted to be, and farmland was the best investment I could identify," Vieth said. By May 2011, he had collected 6,976 hectares, mostly in the Midwest.

Possible bubble

When Vieth wants land, he goes shopping. Armed with aerial and soil maps, he looks for farms with predictable rainfall, mineral-rich land and good drainage, avoiding land that slopes too much, which could lead to soil erosion.

Driving by a 136.4-hectare farm for sale by a bank, Vieth frowns at the slant of the land and the trees that line the perimeter. "Those trees will shade the corn and stunt growth," he said.

The farm-investing boom is making lots of people happy, but could it all end in tears? The Federal Deposit Insurance Corp (FDIC), which regulates banks that lend to farmers, has examined whether investors may be pumping up prices and creating the conditions for a crash like the one that devastated the market in the 1980s, resulting in the failure of 300 farm banks.

In March, then-FDIC Chairwoman Sheila Bair devoted a symposium to the topic in Washington with the participation of economists, bankers and agricultural experts. "If there is a bubble in farmland prices, I hope the bulk of any correction is borne by investors such as hedge funds and not by the banking industry," William Isaac, chairman of the FDIC during the farm banking bust, said during the event.

Vieth's farm funds are facing head winds in the coming months and years. A likely rise in interest rates will push up his acquisition costs and the value of the dollar, which in turn might hurt commodity exports. While the former trader keeps a close eye on the dollar, he says farming will continue to thrive.

Investors seem to agree. Vieth sits down at his computer one evening and totals the day's haul: another $900,000 from investors looking for comfort - and profits - in one of the oldest and most essential industries on the planet.

Bloomberg News