Limited Supply and Investor Interest Contribute to Resilient Ag Land Market
The agricultural land market has proven to be resilient through mid-2025, despite challenges such as volatile commodity markets and uncertain farm profitability.
According to Farmers National Company, the basic principles of supply and demand are keeping land values stable. The market continues to be driven by more motivated buyers than available sellers.
Producers remain the primary buyers of agricultural land, but interest from individual and institutional investors is also increasing. Investors are drawn to farmland not only for potential annual returns but also for long-term appreciation.
Farm Credit Services of America reports that Midwest farmland values have risen by 56.9% over the last five years and 38.3% over the past decade.
Inventory remains limited, with listings down by 20-25% from the peak levels seen in 2020-2021. This has led many long-term landowners to retain their properties, recognizing the stability and value appreciation farmland offers, especially compared to other volatile investments.
Paul Schadegg, Senior Vice President of Real Estate at Farmers National Company, emphasizes the impact of farm profitability on land values. "The USDA forecasts 2025 net farm income to be the lowest since 2020.
This will likely influence producer purchasing power and investor returns, especially as input costs, commodity prices, and interest rates fluctuate," Schadegg says. "While balance sheets generally remain strong, any negative movements in the ag economy could quickly impact the land market."
Geopolitical factors also play a role in shaping land values. Trade policies, tariffs, and global unrest can introduce uncertainty, affecting both domestic and international agricultural markets.
While new trade agreements may offer future opportunities, current tariffs may reduce demand for U.S. agricultural exports.
Looking forward to the second half of 2025, those with strong financial positions—whether producers or investors—will be best prepared to pursue land purchase opportunities.
During periods of volatility, Farmers National Company anticipates high demand for real estate and management services as landowners seek guidance in the current market.
Farmers National Company has successfully marketed over $450 million in land value during the first half of 2025, showing a strong start for the year.