Farmers like Terry Pratt are a big reason Midwest farmland prices seem to be defying gravity—for now.

Inside the tidy red-brick community center here, a hushed crowd of town merchants and growers watched as two of their own bid against each other at an auction for 50 acres of corn and soybean land.

With slight nods and the waggling of a finger, the rivals yanked the price higher and higher as auctioneer Troy Louwagie chanted into his hand-held microphone: “Will you give 61 and 62, and a two and a two? Will you give 6,200 on a good farm today?”

The auction was over in 15 minutes. Mr. Pratt’s winning bid of $7,875 an acre was nearly double the rate he paid for a nearby parcel just four years ago. “Chances are if another person bought it, it would have never sold again in my lifetime,” Mr. Pratt said.