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Farmers National, which manages more than 5,000 farms and ranches in 24 states. Rising interest rates could reduce farmland values by as much as 15 percent within two years, he says. Rural bankers are getting more bearish, according to the Rural Mainstreet Index created by Creighton University from a survey that measures attitudes of lenders across 10 Midwestern states. Its gauge of farm and ranch land prices sank to 28.8 in December, the 25th straight month below a growth-neutral rating of 50.

Could land then become more affordable for farmers thinking of expanding? No such luck. “Land prices are down very little relative to the drop in farm income,” says Dan Kowalski, director of research at Cobank, a cooperative member of the Farm Credit System in Greenwood Village, Colo. “As the liquidity situation for farmers changes, buying farmland will become a more difficult decision.”

Because of the fat years, farmers probably won’t see the same kind of economic crisis they did in the 1980s, says Paul Pittman, chief executive officer of Westminster, Colo.based Farmland Partners, a real estate fund that owns about 108,000 acres across the U.S. Most are in better shape financially after years of high prices, and the interest rate increases so far are relatively small.

For Anthony Bush, who farms more than 1,400 acres of corn, soybeans, and wheat outside Mount Gilead, Ohio, higher interest rates are just another sign that the mood is shifting. “I look for a period of pretty tough times,” says Bush. “I need to borrow money in the spring to cover the costs I pay off in the fall, so when you’re buying your seeds, your fertilizer, you have to take on your debt all at once.” Even with those increased costs, he expects farming to remain viable. “If you want to stick in this business, you have to be an eternal optimist,” Bush says. “We may not have cheap interest rates. But we’ll still have to eat.”

The bottom line This year will test the mettle of U.S. farmers as the boom that drove land values and crop prices sky-high comes to an end.

Edited by Christopher Power Bloomberg.com