The International Crisis Group (ICG) said the long-running battle for land and resources, fuelled by pressures from an increasing population, was now "Nigeria's gravest security threat," outstripping the peril from jihadism.
At least 1,500 people have been killed in clashes between nomadic herders and sedentary farmers in central states since September last year, the thinktank said.
Of these, more than 1,300 occurred between January and June this year, it added.
This is at least six times higher than the number of people estimated estimated by the UN to have been killed by Boko Haram in the same period.
The ICG said some progress had been made in tackling the crisis but more needed to be done ahead of elections, which typically heighten the risk of ethnic, religious and political tensions.
"It (the conflict) is exacting an ever deadlier toll and, with elections looming in 2019, could destabilise the country if the government and other actors fail to contain it," it added.
The first half of this year was the deadliest six months since the crisis worsened in 2014, it said in the report, "Stopping Nigeria's Spiralling Farmer-Herder Violence".
The overstretched police and military were unable to cope and with attacks largely unpunished, communities had taken matters into their own hands.
But much of the tit-for-tat violence has become more planned and involved increasingly well-armed and organised militia.
In the deadliest attack, 11 villages were attacked last month in the Barakin Ladi area of Plateau state, in which more than 200 people from farming communities were killed.
Human and political cost
The ICG said "scorched-earth" campaigns had made more than 300,000 people homeless, with the displaced forced to stay with family and friends or in overcrowded, unsanitary camps.
Local aid agencies were overwhelmed but there was very little help available elsewhere because of the humanitarian crisis sparked by the nine-year Boko Haram insurgency, it added.
Mass displacement has had an affect on food production and was likely to drive up prices, as farmers were unable or unwilling to work the land because of fear of fresh attacks.
President Muhammadu Buhari has been accused of failing to act against the herders because, like him, they are ethnic Fulani and Muslim.
The ICG said that argument was "unsustainable", as Buhari had equally been unable to stop a rise in banditry and cattle rustling against Fulani Muslims in some northern states.
But the perception had increased anti-Fulani and anti-Muslim sentiment in a country where communal tensions are rarely far from the surface and frequently boil over into violence.
On the election, the researchers said the unrest could affect the ability of people to register to vote and political campaigning.
Buhari, who was elected in 2015 on a pledge to defeat Boko Haram and improve security across the country, could equally see an erosion in support in central states, they added.
He may still be able to rely on widespread support in his northern powerbase but his security record could hurt him elsewhere, they added.