A new report from Farmers National Company (FNC) shows land values have remained relatively stable in the Midwest, with two types of buyers largely driving demand.
“There are many factors for buyer motivation, but much of it can be explained by mindset translating to demand,” said Paul Schadegg, senior vice president of real estate operations at Farmers National Company. “Farm operators continue to be the primary buyers of ag land. Their mindset or motivation revolves around reinvesting in their farm enterprise, expanding operations, and utilizing today’s farm equipment fully. Location of land offered for sale also plays a large role in their decision making, as often this land has not changed hands for generations and once sold, may not be sold again.”
FNC predicts farmers will remain the primary land buyer in 2025. The second largest buyer is investors, who Schadegg says are driven by a completely different motivation.
“There is virtually no emotional motivation, as buying decisions are based on return on investment or anticipated appreciation of land value,” Schadegg says. “Many land investors have not experienced the rise and fall of agriculture cycles but fully appreciate the long-term value of land. As pressures on the ag economy increase, investors stand ready to bid on land that fits their investment criteria.”
With farmland’s long-term appreciation and annual return on investment, there are currently more buyers than sellers out there. The company reports land listings are down across the industry, on average, 25% from the active and accelerating value market experienced between 2020-2023.
- Indiana, Ohio, Michigan, Kentucky:
Sales have decreased in this area compared to the previous three years. Jay VanGorden, area sales manager for the east region, says land values have seen minimal price drops for highly tillable and quality soil-type farms in most areas, but farms with lower-quality soils, lower tillable percentages, and poorer drainage have dropped off more significantly. - Illinois and Wisconsin:
Land sale values have increased in some parts of this region. Nate Zimmer, area sales manager for the east-central region, says record-breaking sales aren’t as common as they were though, and no-sales are popping up more - a sign seller and buyer expectations are not in alignment. Zimmer adds the method of listing is shifting more toward private treaty as well. - Iowa and Southern Minnesota:
Average land values have dropped 5% to 10% in the past year in Iowa and southern Minnesota. Thomas Schutter, area sales manager for this region, says alternative sale methods have become more common here, particularly for lower-quality farms. While higher-quality farms are still predominantly sold through auctions, there has been an increase in the use of traditional listings and sealed bids for marketing farmland in some areas. - Kansas, Eastern Colorado, Western Missouri:
Values have fallen in some areas of the south-central region, such as in southwest Kansas due to water availability. But other areas are still fetching top dollar for high-quality cropland and recreation properties, according to area sales manager Steve Morgan. - Western Nebraska, Northwest Kansas, Northeastern Colorado:
Cole Nickerson, area sales manager for the western region, says neighborhood demand and land quality are the primary drivers in the western region. Land values have remained high in regions with strong cattle production, high-quality irrigated and productive dryland farms and quality grassland. He adds economic challenges in the corn and soybean markets have made farmland more difficult to sell in areas dominated by row crop production. - Eastern Nebraska and Western Iowa:
Chanda Scheuring, area sales manager for the west-central region, has seen the buyer-pool in this area shrinking. She shares buyers, both local farmers and investors, are still interested in making farm purchases. However, they’ve become more selective with properties and the price they are willing to pay. Dakotas and Western Minnesota:
The land market in the northern regions is best described as chaotic, according to area sales manager Troy Swee.“Land values remain very strong in areas where not much land has sold, and the producers had an above-average crop in 2024,” Swee explains. “However, in areas with less investor interest and where several farms have already been sold, land values appear to be down 10% to 15%.”
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