Farmland Values Inch Up in Market Readjustment

Limited land supply, strong yields, and steady demand support the market—though not enough to drive broad growth

(Ames) The annual Iowa State University Land Value Survey found that average farmland values increased 0.7%, or $83, to $11,549 per acre. Although this year’s nominal value is higher than last year’s, it remains about $286 per acre below the 2023 peak of $11,835.

Dr. Rabail Chandio, who leads the annual survey, noted that changes under 5%—up or down—tend to signal market adjustments rather than meaningful shifts.

“Changes of that size often reflect variation across counties and crop reporting districts rather than a consistent statewide trend,” she said. “It wasn’t a boom or a bust, just a very uneven adjustment, with the story changing as you move across the state. Strong yields, limited land supply, and solid livestock income helped prop up values in some areas, but lower commodity prices, high interest rates, and rising costs pulled them down in others.”

Nominal Gains vs. Real Losses

This year, nominal land values increased, but inflation-adjusted values declined. Chandio said that while rising nominal prices can still help farmers, the benefit is limited.

“A farmer selling land this year will receive more dollars than last year, and that can still support goals like paying down debt (whose real burden also shrinks with inflation), transitioning to retirement, or reinvesting elsewhere. In that sense, the higher nominal price provides some benefit,” she said.

However, she noted that falling real values reduce purchasing power. “Sellers may find that the proceeds won’t buy as much machinery, land, or inputs as they would have a few years ago. So, while selling today can still improve a farmer’s financial position, the real economic gain is smaller than the nominal price increase suggests.”

Forces Pressuring the Market

Despite modest overall growth, several factors applied downward pressure on farmland values this year.

Interest Rates

Chandio highlighted federal interest rates—only modestly reduced in 2025—as a continued drag on the market.
“Because we haven’t seen any major reductions, the market is still feeling the weight of the rate hikes from 2022 and 2023,” she said. “And since interest-rate effects take years, up to a decade, to be fully capitalized in land values, those post-COVID increases are still working their way through the system.”

Commodity Prices and Tariffs

Commodity markets also played a role. Chandio described commodity prices as ‘soft’, though she noted tariffs were only a minor influence.

“Tariffs may have been part of the background noise, but they weren’t a major driver of farmland values,” she said. Farmers, she added, are still facing tight margins, even with some easing in production costs.

Iowa Land Values Show Growing Regional Divide

Chandio said she feels one of the most interesting aspects of this year’s report is how divided the market has become. “Even though the statewide average ticked up 0.7%, most counties actually saw declines once you adjust for inflation, and three crop reporting districts posted nominal drops. At the same time, places in the northeast saw increases of 3–4%, while parts of central Iowa slipped by 2–3%,” she said.

Land Values by County

Sixty counties reported increases in nominal land values; however, 78 counties reported decreases in inflation-adjusted values.

• Highest Value: O’Brien County at $16,269 per acre, an increase of $348 (2.2%).

• Lowest Value: Appanoose County at $6,679 per acre, a decrease of $160 (-2.3%).

• Largest Dollar Increase: Dubuque County with a $553 per-acre gain.

• Largest Percent Increases: Clayton and Allamakee Counties, each up 4.4%.

• Largest Dollar & Percent Decrease: Kossuth County, down $552 per acre (-4.3%).

Land Values by District

Land values increased across six of Iowa’s nine crop-reporting districts.

• Highest District Average: Northwest at $14,522 per acre

• Lowest District Average: South Central at $7,623 per acre

The Northeast district reported both the largest percent increase (4.1%) and largest dollar increase ($481 per acre).
The North Central district saw the largest percent decline (-2.6%) and largest dollar decline (-$315 per acre).

Land Values by Quality

Statewide averages by land quality:

• Low-quality land: $7,580 per acre — up 1.7% ($130)

• Medium-quality land: $10,809 per acre — up 0.6% ($69)

• High-quality land: $14,030 per acre — up 0.7% ($101)

Regional extremes:

• Highest Values (Northwest):

  • High-quality: $16,519

  • Medium-quality: $13,507

  • Low-quality: $9,792

• Lowest Values (South Central):

  • High-quality: $10,677

  • Medium-quality: $7,465

  • Low-quality: $5,199

Factors Influencing the Market

Negative factors cited:

• Lower commodity prices — 32%

• Long-term interest rates — 22%

• Tariffs and trade uncertainty — 13%

Positive factors cited:

• Limited land supply — 21%

• Strong yields — 13%

• Cash/credit availability — 10%

About the Survey

Land values were determined by the 2025 Iowa State University Land Value Survey, conducted in November by the Center for Agricultural and Rural Development at Iowa State University and ISU Extension and Outreach. The results align with findings from the Federal Reserve Bank of Chicago, the REALTORS® Land Institute, and the U.S. Department of Agriculture, all showing only modest changes across land markets.