Land values have largely stabilized nationwide and are being driven by local and regional factors, according to a new report from Farmers National Company.
According to the report, demand for farmland "varies widely by location." Land values are remaining steady in areas with high crop yields, diversified farms, and dependable groundwater, while less demand is being seen in places facing commodity price pressure, lower yields, or limited alternative income sources, the report says.
However, the report says: "Despite mixed signals, market conditions remain favorable for many sellers. Farmland remains a resilient, long-term asset, and well-priced properties are attracting strong interest."
“After years of steady growth, we’re seeing the farmland market stabilize,” Farmers National Company Senior Vice President of Real Estate Operations Colton Lacina said in the report. “This isn’t a sign of collapse but a recalibration that reflects current commodity prices, input costs and regional production conditions."
In Kansas, south-central Nebraska, and Missouri, land markets "continue to show resilience, supported by strong agricultural communities and a solid base of productive farmland," FNC area sales manager Steve Morgen said in the report. He noted that farms with soil limitations, access issues, or other flaws are the first to see a decline in value, while pasture and recreational properties "remain highly attractive."
"Larger grassland tracts are especially desirable for grazing and livestock operations, while smaller recreational parcels are actively sought by buyers interested in hunting or outdoor recreation,” Morgan said.
Meanwhile, in Indiana, Ohio, Michigan and Kentucky, "a strong mix of investor buyers and active farmers has driven competition and kept sale prices for high-quality farmland at record levels," Area Sales Manager Jay Van Gorden said in the report. He added that Farmers National has seen land with "highly tillable, productive soils" being sold in the region for between $15,000 and $19,000 per acre in recent weeks.
Don’t miss a beat! It’s easy to sign up for a FREE month of Agri-Pulse news! For the latest on what’s happening in Washington, D.C. and around the country in agriculture, just click here.
However, the report noted that farms with fewer tillable acres, woodland, and medium-productivity soils "are not at record levels, but they still fetch prices near the top of the range for their type."
In Illinois and Wisconsin, "there have been several notable sales" in recent weeks, "but brokers are also noting lower sale prices on high-quality tracts where strong competition previously seemed automatic," Jim Ferguson, area vice president, said in the report.
"The market has seen multiple auctions end in no-sale or be sold afterward, indicating that farmer buyers — traditionally the main force behind Midwest bidding — are showing noticeably more caution than in previous years,” he added.
In North Dakota, South Dakota and Minnesota, "real estate activities remain strong," though "auction results have varied," Area Sales Manager Troy Swee said in the report.
"When few land sales have occurred nearby over the past 18 months, auctions perform exceptionally well" in less active areas, the report said. "For example, a recent sale in Lyman County, South Dakota, exceeded expectations by more than $3 million," it cited Swee saying.
However, the report went on to note that in high-activity areas, "when multiple sales occur near the listed property, bidder enthusiasm tends to be more restrained, and prices fall 5–10% below the 2022 peak."
In eastern Nebraska and western Iowa, "the supply of farms for sale remains similar to last year, but the overall buyer pool appears to be shrinking quickly," Area Sales Manager Chanda Scheuring said in the report.
"Farmers and investors are becoming more selective about which properties to add to their portfolios and the prices they're willing to pay," she said. "They are only making purchases they feel comfortable with, given tighter profit margins."
