The surge in commodity prices over the past few years has helped farmers recover from the recession and has fueled a real estate boom in the Midwest, analysts say.

Farmers in the Midwest are benefiting from rising income as global demand for their crops jumps; that demand is translating into a rise in real estate prices as those looking to get into the farming industry are helping to drive up prices. For example, one of the most sought-after properties in the Midwest right now is 120 acres of farmland in Green County, Iowa, Bloomberg reports.

St. Joseph's Paris Center in Jefferson, Iowa offered almost $1 million for that parcel of land - 44 percent higher than the per-acre estimate for average values in the county, according to Iowa State University data. Mike Duffy, an Iowa State economist, said the sale of the farm land is "reflective of what we're seeing" in the Midwest. "There's just not a lot of ground offered for sale," he affirmed.

In the fourth quarter of 2010, farm land prices in the Midwest jumped the most in over two years. While the gains are a boon to the economy in the central part of the U.S., prices could continue to rise and may lead to a bubble, warned Sheila Bair, the chairwoman of the Federal Deposit Insurance Corp.

Prices in Iowa could increase 10 percent this year if commodities stay at their current price levels, analysts affirm.