Farmland Holds Value in 2024

Farmland Values Expected to Remain Steady Near Record Levels in 2024

Elizabeth Williams
By  Elizabeth Williams , DTN Special Correspondent
Farmland values are expected to remain steady in 2024. Interest is particularly high in the Delta region where prices are often significantly less than in the Corn Belt but yields are comparable. Supportive soybean prices and underlying demand for biofuels help, too. (DTN file photo)

INDIANOLA, Iowa (DTN) -- Good yields, strong 2023 farm incomes, a shortage of farmland for sale and moderating interest rates have farm real estate experts optimistic about keeping land values at current high levels heading into 2024.

At DTN's virtual Ag Summit on Dec. 5, farmland specialists were in general agreement about steady farmland values for next year.

"We had some exceptional yields this fall," said Howard Halderman, president of Halderman Farm Management. The business is based in Wabash, Indiana, and oversees farmland assets in 22 states. "That, combined with the potential for declining interest rates, layered on top of soybean prices hanging in there at a high level, I think we're in for steady land values at these high levels through 2024," he said.

In the Delta, where land values haven't risen as fast as in the Corn Belt the past three years, it's still a seller's market, said Jeramy Stephens, partner and managing broker for National Land Realty in Little Rock, Arkansas. Land buying interest remains strong for top-quality cropland and marginal cropland with a high recreational value influenced by duck hunting.

From 2020 to 2023, farmland values jumped 30% to 40% in Indiana, Illinois and Iowa, according to USDA. During that same period, cropland in Arkansas, Louisiana and Mississippi increased only 10% to 11%.

That's part of why the Delta still attracts investment buyers. David Martin, managing director of USAgriculture, a farmland investment advisor based in Indianapolis, told Ag Summit attendees that his firm is looking for investments in the Delta region over the next three to five years.

"You can buy Arkansas farmland for $6,000 per acre, which is about half of what Midwest farm values are today. But you can achieve 80% to 90% of the corn and soy yields at half the cost, especially given some of the soy dynamics that we're seeing in the marketplace developing with renewable fuels," explained Martin.

In 2022, farmland values hit all-time highs, both nominally and adjusted for inflation, said Halderman. In Indiana, they use a soil productivity scale called Weighted Average Productivity Index (WAPI). Based on cropland sales by Halderman Farm Management, land prices based on the index have been hanging around $80/corn per bushel (bu) to $90/corn bu, taking the sales price divided by the estimated corn bushels that soil averages.

"It's now on the low end of that, around $80 in 2023," explained Halderman. So, while land values are not making new record highs, the market still has underlying support.


High interest rates -- 7% for term debt and 8% to 10% for operating loans -- negatively affect the farmland market, said Martin, whose investment company owns 60 farms in 14 states producing 20 different crop types. But the effect isn't that immediate.

"Mortgage debt is long-term, and most farm owners have locked in low-interest rates. So, only the new debt is experiencing higher interest rates," advised Halderman.

The last time rates shot higher like this was in the 1980s when farm operations paid an average of 35 cents in interest expense for every $1 earned in farming, Halderman said. Today, that's only 12-15 cents in interest expense for every dollar earned in farming.

A study by Iowa State University showed as much as 84% of Iowa farmland has no mortgage debt. "That's probably consistent around the Corn Belt," Halderman added.

For the latest results of the Iowa State University Land Values study,, please read:…


"Cash rents generally lag land values," Halderman said. Even if land values decline, rents don't go down as quickly, and when land values climb, cash rents rise more slowly. "At Halderman, we manage 700 farms and our rents are still experiencing a lot of strength going into 2024," said Halderman.

Stephens said cash rents in the Delta are around $225 per acre. "We've seen $250 to $275 per acre with some rents pushing $300. But for the most part, the top for the best cropland is $250 per acre. Flex rents for quality land are generally $200 cash rent plus a flex," he added. For B and C cropland, cash rents range from $150 to $175 per acre.


On the plus side, fertilizer, pesticide and energy costs continue to come down, making profit and loss look better for 2024 row crops, noted Martin. And the general low supply of farmland coming to the market for sale props up land values.

What would cause land values to drop?

"If we saw $4.25 per bu corn for an extended period or soybean prices decline to $11 per bu, farm incomes would take a hit and that would pressure land values," said Halderman. The University of Illinois estimated 2024 corn/soybean budgets for Illinois farmers at $5-per-bushel breakeven for corn and $12-per-bushel breakeven for soybeans.

Halderman explained commodity prices could sink if South America has a large crop, geopolitical problems worsen and the global economy slows down. "Then you could see a 10% to 15% decline in land values," he advised.

If there is not a supply shock, Martin anticipates neutral appreciation rates for the next couple of years in farmland values.

Elizabeth Williams