Farmland value annual percentage increases slowed by almost half in Oklahoma compared to several years ago. Kansas’ growth was about one-third of what it had been. Similar change hit Minnesota. Iowa’s increase barely topped one-fifth of its previous percentage growth. California’s appreciation was closer to one-sixth of what it had been. All those bested Wisconsin, which saw values stuck in neutral with no growth over the most recent period.
Overall, the rapid escalation in farmland values that key agricultural states experienced during the beginning of the decade have changed considerably lately. Some may say that was inevitable.
Land values in Kansas went up nearly 23% in 2021-2022. Iowa’s values increased nearly 20% over that period. And Minnesota’s jumped nearly 16%.
Even with increased interest from institutional investors, farmland in some ag-heavy states has been unable to continue its double-digit valuation increases from three to five years ago. This piece from Investigate Midwest looks at the changes in farmland values each year in different states.
Higher interest rates, inflation, increased employee wages, and numerous international conflicts have disrupted the agricultural industry. Those challenges force negative pressures on land values.
RELATED: Just because farmland prices are not going up as fast as they were compared to several years ago, that doesn’t mean that they aren’t demonstrating value. A 40-mile tract in northwest Iowa sold for $22,600 per acre last month.
Nebraska Land Values Dropped Over the Past Year
For the first time in six years, farmland values have dropped in Nebraska (non-inflation-adjusted market value). This is according to the University of Nebraska-Lincoln’s 2024-2025 Farm Real Estate Market Survey. The survey cited three main culprits for the two percent decline:
1. Lower crop prices
2. Higher interest rates
3. Higher farm input costs
Only one of the state’s eight regions in the survey showed land values increasing over the past year. That was the northwest where values rose one percent. The northeast region of Nebraska dropped the most. Values declined by three percent.
The survey not only divided Nebraska into geographic regions to track land values, but it also looked at trends based on the use of the land. Gravity irrigated land tumbled the most over the past year with a five percent drop in value.
Average grazing land and hayland values brought the biggest gains with a variation of one percent to five percent higher.
“High interest rates and lower crop prices have tightened farm finances, leading to cautious land and equipment investments,” said Jim Jansen, extension agricultural economist, who leads the survey. “With borrowing costs at multi-decade highs, land markets have slowed as producers navigate these financial pressures.”
Net farm income for Nebraska farmers dropped 17% in 2024, according to the USDA.
RELATED: Nebraska Farm Bureau President Mark McHargue talked about the value of diversifying his own farm operation to help offset market challenges and underscored the importance of protecting the ability to export product, something that could be jeopardy in a prolonged trade war. Watch that conversation with American Farmland Owner here.
