We’re at the beginning of a multi year retrenchment (collapse in prices) in the agriculture sector. As my clients know, I think the entire agriculture commodity complex is in a historic bubble that was single handedly driven by the corn ethanol mandate, a policy that diverted 40% of the corn crop away from the food supply. Add in the nasty 2012 drought and you have an unprecedented bubble in the sector.
Remember that a bubble is a price movement not explainable by the ordinary forces of supply and demand. I would explain the movement in prices in the graph above by noting that the original ethanol mandates in gasoline drove up corn prices, and then prices for farm land. If these increasing prices cause buyers and sellers to form expectations that prices will continue to rise, these expectations can become self fulfilling if buyers accelerate purchases, and sellers delay sales, to take advantage of the expected price increases.
The so called "bubble" pops when prices deviate from their long run value, and enough market participants suspect that the prices are no longer supported by fundamentals of demand and supply.