New data assembled by Realtors Land Institute (RLI), the National Association of Realtors Research Group and Acres, highlights fundamental trends driving the land market today. But this year’s Land Market Survey, which was augmented by research conducted by Acres, unveils two trends in farmland regarding quality and productivity ratings as well as other trends important in the business management of farmland.
First, Overall Land Trends
In addressing widespread concerns about a potential U.S. recession, Dr. Lawrence Yun Chief Economist and SVP of Research, National Association of Realtors emphasized that, despite recent oil price shocks and persistently low consumer sentiment, the U.S. economy is not on the brink of recession.
The survey details multiple industries and sectors in land use and values, and for 2025, In terms of price growth, the ranch category led with a 2.2% increase in dollars per acre, outperforming other land types. Industrial and recreational land also saw solid gains of 1.9% each, while other categories experienced moderate increases. Notably, Commercial Real Estate Data Analyst, Oleh Sorokin anticipates that while land sales will strengthen in 2026, the pace of price growth is expected to slow, with projected increases in the ranch category dropping to 0.9% per acre.
How Are Farmland Values Performing Differently?
The presenters highlight the energy price correlation as Farmland values and operational balance sheets are heavily tied to energy prices, as oil and gas drive both fuel costs and fertilizer prices.
“Tariffs are one that it’s kind of dwarfed now by the energy situation, but tariffs were a pretty big impact last year,” says Aaron Shew, chief technology officer at Acres.
With fuel input prices and fertilizer input prices highly driven by energy prices, those effects are being monitored closely both in terms of price hikes but also duration of elevated prices.
He continues, “Some of the energy challenges that we’re undergoing with the war in Iran and the blockade, Straits of Hormuz, I think that has the potential, maybe less in the broader real estate market, but for farmland specifically, that could have a pretty large impact, depending on how it resolves, how quickly that happens.”
What Are The High Interest Trends?
Shew’s research reveals two eye-catching farmland value takeaways.
1. Midwest Market “Pullback": Class A farmland in the Midwest is seeing a “mature” pullback of about 10% from the 2021–2022 peaks, while Class B ground remains slightly more resilient.
First Shew notes, 2021 and 2022 saw 1.5x to 2x the average number of land transactions. The highest value per acres sales during that time earned a lot of attention. What he refers to as “hype.”
“Particularly in Iowa and Illinois, where farmers were buying farms for $25,000 or $30,000 per acre. you have these outlier transactions. It’s very, very few, but they catch a lot of attention and that kind of pushes some land values up.”
He says that raised expectations that Class A—or the highest rated productivity ground—had reached a new plateau in values and wouldn’t go down.
But Shew notes, as of 2025, there’s been a 10% pullback from those ’21 and ’22 peaks. And that’s on the highest rated ground in terms of productivity.
Class B ground values have been more resilient.
2. In California, Water is Half Your Land’s Value
Looking at the data, Shew says in California, water security drives the value, particularly for permanent crops. Tier 1 districts with multiple water sources maintain high values, while “white space” (areas without district water) is seeing significant distress and land fallowing.
“A lot of people are already talking about water regulations, how water security plays a role, and, permanent crops have been under duress for close to three years now,” Shew says. “So that’s not new, but we’ve quantified the impacts regionally, and across ag districts, and by permanent crop type.”
The crops showing this trend in spades: almonds and pistachios.
“For Tier 1 districts, for almonds, you’re looking at $30,000 plus an acre. And then you go to Tier 2 districts, and you’ll see it around a little over $20,000 an acre. Outside of districts, it’s called white space and you’re actually at $13,000 per acre, which is almond ground being sold as bare ground—rip and replace.”
He says Sustainable Groundwater Management Act (SGMA) will mean that 500,000 to 750,000 acres of irrigated farmland will have to be fallowed or pulled out by 2040.
“So that’s about 10% of the farmland in California’s Central Valley, most of it in San Joaquin,” so we’re seeing some initial phases of that as we’ve seen tens of thousands of permanent crops come out in the past few years,” Shew says.
He adds, “Water regulatory bodies have put more pressure on farming in California. It’s just going to create a harsher environment for how water gets distributed and allocated.”
Resilience via Government Assistance
Programs such as the Farmers Bridge Assistance are preventing forced land sales by supporting farm operations, which keeps land values stable despite two years of challenging economics. He says we are reaching the tipping point in year three.
“Farm operations can be poor for a year or two and you’re not really going to see it show up in land values,” he says. “But we’re on a third year of this, and we’ve got other challenges that are fairly unprecedent at the same time, so there’s a lot to watch.”
“If you have to declare bankruptcy on your farm, 80% of most farm balance sheets is land, so that’s the first thing that’s going to get sold,” Shew says. “Government policies to provide support, The Farmers Bridge Assistance is the most recent one that probably plays the largest role, and it just helps farmers get to the end of ‘26, where hopefully balance sheets are in a good place.”
He’s also watching how the provisions in the One Big Beautiful Bill come to bear this fall and at year end.
“Reference prices for, rice, in particular, is one that comes to mind. Those will take place and hopefully create some stability, but you have got to get to the end of the year.”
Transaction Volume Stabilization
Nationwide transaction volumes have returned to pre-pandemic (2018–2020) levels, though California is seeing an uptick in volume due to “distress sales” from owners who can no longer float the costs.
“The low interest rates ‘21 to 23, roughly created a great time for folks to invest in land. They wanted to deploy capital, and land is the definition of a real asset,” he says. “You had that boom, and then, of course, as rates went up in ’23 and ’24 and values stabilized at much higher levels, it turned off that capital allocation.”
National farmland transaction volumes in 2024 and 2025—transaction count, acreage turnover, and overall volume of dollars—is approximately the same as 2018 and 2020.
“Q4 of ‘21 and Q1 of ‘22, we saw three times the typical amount that would turn over,” he says. “So in Q4 of 2021, we saw 10 billion in farmland in one quarter—high volume and high values.”
While 2021 was the big, from a year-over-year standpoint, that began to fall back, by 20%, then 30%. He says the flattening from 2024 to 2025 is a bright spot to show overall stability.
“We’re not going to continue to see less transactions or lower sales volumes. We’re seeing that stabilize at a more consistent level alongside where interest rates are,” he says. “And presumably, if we see interest rates decrease, we will see that pick back up, and start what may be another cycle.”