Cropland Values Soar 37% in Four Years

U.S. cropland is worth an average of $5,570 an acre, an increase of $1,510, or 37 percent, since 2020, according to the USDA’s annual Land Values report. The surge in land values accompanied the four highest years of net farm income, a gauge of profitability for American farmers.

The USDA said cropland value rose by $250 an acre, or 4.5% from 2023. It was the smallest increase since value began to rise in 2021, after six years of stability. It averaged $4,060 an acre in 2020. Value rose $290, or 7.1%, in 2021; by $590, or 13.6%, in 2022; and by $380, or 7.3%, in 2023.

California cropland was worth $17,330 an acre, the highest average value in the country. Three Corn Belt states had land values above $9,000 an acre: Illinois, $9,550; Iowa, $9,800; and Ohio, $9,270.

Ag bankers say they expect small increases in farmland values this year, or even a standstill. High interest rates and declining commodity prices were making buyers more selective, they said in surveys by the Federal Reserve in the spring.

The Land Values report is available here.

EDITOR’S TAKE:

If there is any good news in agriculture these days, the rising land values are at the top of the list. A farmer’s net worth, in most instances, is tied up in the farmland they own. This shows up directly on their balance sheet and helps increase their net worth. That extra equity is how they also qualify for future loans for capital improvements or even operating loans. Either way, it is the financial foundation of their operation. That is why farmers/ranchers, despite a reduction in commodity prices, should still be high on your list of prospects.