The USDA’s annual Land Values summary reports that the average value of farm real estate was $4,170 per acre in 2024, a 5% increase from 2023. This rise of $200 per acre marks a deceleration in the growth rate compared to previous years.
“This deceleration can pose some challenges for farmers. Farmers rely on the equity in their land to finance their operations and investments,” wrote Daniel Munch, American Farm Bureau Federation economist, in a Market Intel report. “Slower growth in land values means slower growth in equity, which can reduce farmers’ ability to leverage their assets for additional capital to purchase inputs like seed and fertilizer. Lenders might perceive a higher risk in lending to farmers, especially if they expect land values to plateau or decrease.”
The National Agricultural Statistics Service’s (NASS) August report showed cropland values rose to $5,570 per acre, an increase of $250 per acre, or 4.7%, from the previous year. The average pasture value was $1,830 per acre, up by $90 per acre, reflecting a 5.2% increase from 2023. Farmers paid an average of $160 per acre to rent cropland, with rents averaging $245 per acre for irrigated land and $146 per acre for dryland.
Farm real estate value
The 5% increase in the average value of farm real estate, including the value of all land and buildings on farms, was less than the 6.7% increase in 2023 and less than the 11.7% increase in 2022.
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In the West, California has the highest farmland value at $13,400 per acre, reflecting a 2.3% increase over 2023. New Mexico has the lowest average value at $700 per acre, a 4.3% increase from 2023.
The northern Plains region, comprising Kansas, Nebraska, North Dakota, and South Dakota, saw the most significant increase in land values, with an average rise of 6.6% to $3,050 per acre. Kansas led the way with an 8% increase, bringing its average to $2,970 per acre. Nebraska followed with a 6.8% increase to $4,080 per acre, while South Dakota and North Dakota saw increases of 5.7% and 5.6%, reaching $2,780 and $2,260 per acre, respectively.
The Mountain region experienced an average increase of 3.2% to $1,600 per acre, with Utah leading the way with an 8.6% rise to $3,300 per acre. In this region, land values varied significantly, with Idaho reaching a high of $4,390 per acre, marking a 4.8% increase, while Wyoming’s values were the lowest at $975 per acre, a modest increase of just 0.7% from 2023. Aside from the high farmland values of the West, the Corn Belt has the highest average farmland value of $7,930 per acre, with Iowa at the top with an average of $9,420 per acre. The region experienced a 3.7% increase, and Ohio saw the most considerable percentage increase, 9%, to $8,760 per acre.
Cropland, pasture values
“Cropland values typically are based on how profitable farming the land is expected to be in the long-term, so part of this increase can be linked to the lingering effects of high commodity prices in 2021 and 2022, and expectations of the return from productive land in row crop-heavy heartland states,” Munch said.
Munch noted that the effect has cooled significantly as commodity prices have receded. High interest rates have raised farmers’ borrowing costs, dampening the demand for agricultural land and slowing the increase in land values compared to previous years.
Overall, the 4.7% increase in the average cropland value in 2024 was lower than in previous years, with an 8.1% jump between 2023 and 2022 and 7.8% between 2022 and 2021.
The Southeast region, consisting of Alabama, Florida, Georgia and South Carolina, saw an average increase of 7.2% to $5,640 per acre. Conversely, the Pacific region of California, Oregon and Washington saw a decrease in the average value of 0.2% to $9,520 per acre.
Unlike cropland and real estate values, pastureland values are higher along the East Coast and mid-South, with lower values in the Midwest and Plains states.
Munch wrote pastureland values, like overall agricultural real estate and cropland values, saw gains from the previous year, averaging $1,830 per acre across the U.S. This 5.2% increase is lower than the 6.7% rise in 2023 and the 11.5% jump in 2022, which followed seven years of minimal value increases.
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A significant portion of grazeable land in the West is owned by the federal government and leased to ranchers, reducing real estate competition for pastureland. States with higher pastureland values typically face greater competition for open land.
“In a continued period of heightened input costs further exacerbated by inflationary pressures, high rent and land costs are yet another hurdle for farmers and ranchers working to produce more crops and raise more livestock,” Munch said. “Increases in land values and rents result from rising expectations of higher long-term (nominal) operating profits; and while those increases benefit landowners by enhancing their equity and their rental returns, it also puts farmers on a treadmill, forcing them to cover ever-rising costs for purchased or rented land.” — Charles Wallace, WLJ contributing editor
