Analyses of agricultural land values indicate they have generally remained steady this year despite low commodity prices and high input costs wearing on farmers' bottom lines, but some bankers expect land prices to fall next year.
An Iowa State University survey of land values for all of Iowa's 99 counties released this month found average land values increased 0.75% increase from 2024. That average factors in 60 counties that reported increases in land values, along with 39 that reported decreases, according to Iowa State University economist Rabail Chandio.
Chandio said this shows land prices have stabilized. She noted that the highest decline a county saw this year was 4.3%, while the highest increase was 4.4%.
That marks a shift from past years. Land values grew significantly between 2020 and 2023 before the growth in prices began to stagnate. That "upward journey really slowed down," in 2024 as the farm economy weakened, and "in 2025, it's pretty much stabilized," she said.
"Overall, this is not a great year for ag," Chandio said. "As a result, it's not a great year for farmland."
About half of bankers in 10 agriculture-dependent states surveyed in November expected farmland values to fall between 1% and 9% in 2026. The survey by Creighton University found that 8.3% of bankers expect land values to fall by 10% to 20%.
Another 37.5% expected little to no change in land prices, while only 4% expected to see them increase.
In December, the survey's index for farmland prices rose to 52.5, up from 43.2 in November, above the growth-neutral threshold of 50. However, that is only the second time in the last 20 months that farmland prices climbed above growth-neutral. In November, the farmland price index was at 43.2.
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"There's less demand for farmland, but it's holding up better than the income is holding up," Creighton University economist Ernie Goss said. "The farmer's getting squeezed, but the farmer's still looking at the long run."
By comparison, Goss said farm equipment sales have plummeted. The index for equipment sales in December fell to 15 from 15.1 in November. The farm equipment reading for October had been 18.8.
"When a piece of land comes up for sale, that may be the last time it comes up for sale ... until the new buyer, gets to be retirement age or something," Goss said. "In other words, you're just looking at more long-term factors than you would be for equipment."
Net cash farm income, a measure of producers' cash flow, is forecast at $180.7 billion for 2025, an increase of $36.5 billion, or 25.3%, over last year when adjusted for inflation, according to the forecast issued by USDA's Economic Research Service in September.
Net farm income, a broader measure of profits, is forecast at $179.8 billion for 2025, an increase of $48.8 billion, or 37.2%, over 2024 when adjusted for inflation. February's forecast was for net farm income of $180.1 billion.
Crop cash receipts, meanwhile, are expected to fall 2.5%, not adjusted for inflation, while livestock product receipts rise by 11.2%. Farm sector production expenses are estimated to be $467.4 billion this year, about the same as last year when adjusted for inflation. Labor costs are expected to be 4.2% higher, while spending on feed, pesticides and fuel are expected to be lower.
USDA estimates suggest direct government payments to producers will hit $40.5 billion this year, a $30.4 billion increase from last year, and the largest amount since the pandemic year of 2020.
Chandio said despite limited growth in land prices compared to recent years, they are still "relatively high" from a historical perspective. She noted that in land markets, once prices go up, "they don't really go back down as easily."
"There are much fewer sales than there were a couple of years ago," she said. "That's to be expected when margins are thin, when farmers are struggling."
Nate Kauffman, senior vice president and Omaha Branch executive at the Federal Reserve Bank of Kansas City, similarly said prices are "still pretty elevated" and aren't seeing major declines, despite profitability challenges faced by row crop farmers. He has noticed a decrease in overall land sales, though purchasers are still interested in buying property when it does come up for sale.
"I think that the demand that is out there, it's maybe not as strong as what we've seen in the past, but because there has not been a lot necessarily put up for sale," Kauffman said. "But demand that is there has been sufficient to keep prices relatively high."
Goss said an expected $12 billion in trade assistance could influence farmers' decisions to buy farmland to some degree, but he emphasized that the assistance is a "one-time event" and "to make a significant change in farmland purchases and prices, the farmer will need to see changes in the long-term outlook — and that hasn't turned around just yet."
