Farmland values have been stable despite recent challenges — from political shifts caused by the change in administration to economic fluctuations caused by global market dynamics. This is not a surprise, as historical data has proven them resilient over the years.
In this blog, we explore the historical influence of policy decisions on farmland values according to a recent report by AcreTrader.
We also summarize some of their pricing trends analyses (up to the fourth quarter of 2024) and recommend farm land loans that you can use if you want to expand your agricultural operations or invest in new farmland.
General trends
Farmland values demonstrated remarkable stability despite the headwinds of escalating geopolitical tensions and a tightening monetary policy environment characterized by interest rate hikes in 2024.
This resilience suggests that while policy-driven disruptions (such as tariff implementations) may induce short-term volatility, they do not fundamentally alter the long-term appreciation trajectory of farmland assets. Regional price differences also give investors opportunities to generate higher-than-average returns.
A historical look at how policy decisions affected farmland prices
If you are looking to take out a farm loan to invest in farmland, you may (like many investors) be curious about the potential effects of the new administration on farmland prices — particularly whether potential trade wars and labor issues could negatively impact agriculture.
Although these concerns are valid, historical data from 2017 to 2020 paints a far more nuanced scenario. Policies implemented during this period had a complex impact on agriculture overall, but they did not drastically alter the fundamental economic conditions of farming.
In fact, according to AcreTrader analysts, the policies enacted by the past administration have largely turned out to be beneficial for US farmers, despite initial concerns. This counterintuitive outcome can be traced back to factors independent of domestic policy changes.
For instance, between 2012 and 2016, farmers saw decreased earnings from staple crops like corn and soybeans not due to adverse policies but rather because of an increase in global supply, which was itself a result of favorable weather conditions and ramped-up production efforts internationally. This led to a steep 35% drop in corn cash receipts during this period.
But despite these fluctuations, the agricultural sector’s overall stability remained remarkable. From 2017 to 2020, total cash crop receipts remained relatively steady — they averaged $196.8 billion, which closely mirrored the $195.8 billion recorded in 2016.
This remarkable consistency in crop earnings reveals that global supply and demand dynamics generally exert a stronger influence on agricultural economics than the direct interventions of US administrative policies. It also underscores the agricultural market’s ability to adapt, indicating that external economic factors typically have a more significant impact on shaping the industry’s financial landscape than any single government action.
Direct farm program payments from the federal government
While cash receipts for crops dipped by 4% during the first Trump term compared to the previous four years, federal government direct farm program payments more than compensated for this decrease.
When these payments are factored in, total farmer receipts actually rose by 8% between 2017 and 2020 compared to 2013-2016, with a significant 37% increase from 2017 to 2020 alone, according to the report.
Moreover, the overall mood among farmers and rural communities seems to have notably improved post-election, as evidenced by Purdue University’s Ag Economy Barometer, which recorded a peak in farmer sentiment in the month following the election — the highest since May 2021. This positive shift in sentiment combined with the historical increase in farmer incomes from 2017 to 2020 suggests that the farmers’ financial outlook is improving. It also reinforces the minimal impact of policy shifts on the broader agricultural economy.
Farmland prices in the Heartland were steady in 2024
In 2023, farmers experienced a 4.1% decrease in cash receipts from crop sales, and projections indicate a further 9.2% decline in 2024. This downturn is primarily attributed to falling prices for major commodities — notably corn and soybeans. Corn prices, for example, plummeted by 45% from their peak in the summer of 2022, while soybean prices dropped by 41% during the same period.
Despite declining commodity prices and rising input costs as well as escalating interest rates, farmland values in the Heartland (eight states within the Corn Belt) were remarkably resilient in 2024.
In the second quarter of 2022, the prices farmers received for corn and soybeans were at their highest point. At the same time, the US economy was facing rapid inflation. The Federal Reserve was also raising interest rates very aggressively to try to control inflation, making farm loans more expensive.
But these economic difficulties did not negatively affect farmland prices, nor did they deter farmland investors. In fact, the average price of farmland in the Heartland’s eight key agricultural states actually increased. This increase was measured by the price of the land’s inherent soil productivity using the NCCPI score as a benchmark. Essentially, the value of the land’s productive capacity rose by 5.6% between the second quarter of 2022 and the fourth quarter of 2024.
All this means that farmland is a strong and stable investment even when the overall economy is experiencing problems. Even when interest rates are high and farm product prices are falling, the value of the farmland itself is holding — and even increasing.
The key is to adopt a long-term perspective if you’re considering farmland investments. Historical data consistently shows that farmland values withstand political shifts, financial crises, interest rate spikes, and global conflicts, with unique supply and demand dynamics driving their resilience.
Unlike other real estate sectors such as multifamily, there is no way to easily expand the supply of high-quality investment farmland. This limited supply distinguishes farmland assets from other markets and shields them from typical capital cycle fluctuations.
Also Read – 10 Ways Agricultural Loans Can Help Farmers Grow
Finding opportunities in farmland value differences in soft markets
There may be opportunities in the variability of farmland values across markets — in fact, this variability may be a key factor in outperforming market benchmarks for farmland assets, according to analysts. The current softening of the farmland market creates favorable conditions to acquire investment-quality farmland below average prices, adjusted for prevailing market conditions.
For those who are actively exploring farm loans to purchase land or expand their farming operations, the goal is clear: to acquire farmland below market value and achieve above-average returns. Historically, limited data made it difficult to prove this strategy, but land data and mapping platforms like Acres.com now make it possible to analyze real farmland transactions.
The AcreTrader report used Acres.com to analyze real farmland transactions in six Central Illinois counties. This region is known for its high-quality soils and robust market activity and was chosen because it provides a consistent environment for evaluation. Examining transactions based on price per farmable acre, the report adjusted for soil productivity and derived a cost per productivity point encompassing nearly 1,000 transactions. You can see the results here.
It’s important to accurately assess real-time market conditions to effectively acquire farmland below market value. As an investor, it pays to learn how to use land data and mapping platforms to get the insights you need to secure investment-quality farmland at below-market valuations.
Farmland price outlook for 2025
The report’s analysts believe it’s futile to try and predict commodity prices, weather, input costs, or government policies for 2025. What we can expect is continued volatility in these areas, mirroring past trends.
However, investment-grade cropland values should remain relatively stable. And while past performance doesn’t guarantee future results, the shrinking supply of a vital national resource — combined with rising demand — has historically supported consistent asset value growth.
Investors with access to unique data and networks will likely navigate market fluctuations most effectively. The key is to closely monitor land market values in key farming regions and remain ready to capitalize on emerging opportunities.
Explore farm loans with Private Capital Investors
If you’re considering expanding your farming operations or investing in new agricultural projects, you need a financial partner with deep knowledge of agricultural financing.
At Private Capital Investors, we offer a comprehensive suite of farm loans designed to meet all kinds of agricultural needs — whether you are looking for emergency funding, want to acquire new land, or need funds to improve your current operations, our farm loans provide competitive rates and terms to help you invest confidently and sustainably.
With loan amounts ranging from $3 million to $50 million and features like 30-year amortization with no prepayment penalties, our loans are structured to support the long-term viability of your agricultural business. We also provide loans tailored for ranchers and mixed agricultural operations. The funds can be used to assist in everything from infrastructure improvements to livestock purchases.
Private Capital Investors is ready to support your farming endeavors with adjustable and flexible rates and quick approvals (funding is available in as little as two weeks). We operate nationwide and offer services in key agricultural areas.
Don’t let financing barriers stop you from growing your farm. Contact our team of ag lenders here at Private Capital Investors today to discuss how our farm loans can help you achieve your agricultural goals.
