2022 U.S. Cropland Values Hit Record $5,050 Per Acre, Up 14% from 2021

For 2022, USDA reports the value of the nation’s cropland is $5,050. That’s up $630, or 14%, from 2021. This year’s figure marks back-to-back record highs in cropland values. See the full USDA report.

Since 2014 the value of U.S. cropland had hovered around $4,000 per acre, that was up until 2021 when things changed.  

The U.S. pasture value averages $1,650 per acre, an increase of $170 per acre (11.5%) from 2021.
Overall farm real estate value, a measurement of the value of all land and buildings on farms, averaged $3,800 per acre for 2022. That is up $420 per acre or 12% from 2021. 

Here are the states with the 10 highest cropland values:                       

1. New Jersey: $15,900 per acre, up 7% from 2021
2. California: $15,410 per acre, 11% up from 2021
3. Iowa: $9,350 per acre, up 20% from 2021
4. Delaware: $9,200 per acre, up 7% from 2021   
5. Illinois: $8,950 per acre, up 13% from 2021   
6. Maryland: $8,750 per acre, up 10% from 2021
7. Arizona: $8,350 per acre, up 8% up from 2021
8. Pennsylvania: $8,300 per acre, up 9% from 2021   
9. Florida: $7,960 per acre, up 9% from 2021 
10. Indiana: $7,750 per acre, up 14% from 2021   

What’s Ahead for Farmland Values?

The stronger land prices of late 2021 continued higher through the first half of 2022, reports Randy Dickhut, senior vice president for Farmers National Company (FNC), Omaha. Nebraska.

After a calm period in January in which the land market remained steady, sales prices took another jump as a result of the outbreak of war in Ukraine and ongoing inflation fears, he notes. Farmers saw stronger commodity prices and investors wanted a low-risk inflation hedging investment, which together propelled the competition for good cropland.   

“Prices for good quality cropland are up 20% in some areas since the first of the year,” Dickhut says.  "Recent FNC auction sales demonstrate the strength in the land market so far in 2022. Good land that was selling for around $16,000 last fall sold for $19,000 to $21,500 per acre at company auctions in March. This increase in prices is on top of a 15% to 30% jump in value across most Grain Belt states in 2021.”

Read More: Up, Up, Up: 3-Year Farmland Price Trends from 18 States

Will these strong prices continue?  

“The farmland market has shown an incredible level of resilience and depth this summer,” says Doug Hensley, president of real estate services for Hertz Farm Management.

Yet, he says, three major factors that drive the farmland market have begun shift. They include:

1. Grain prices. The late summer marked a softening in grain prices, Hensley says. New-corn prices dropped nearly $1.50 per bushel, and new-crop soybean prices slipped around $2 per bushel versus earlier in the summer.  “It's been a wildly volatile market with some pretty big swings week to week,” he says. “Lower grain prices in the longer term won’t be as supportive to land values as what we've experienced earlier in the year.”
2. Interest rates. The Federal Reserve’s moves to increase short-term interest rates to try to cool inflation is beginning to trickle into the land market, Hensley says. Even though debt financing is not a dominant factor in farmland purchases, due to farmers haven’t equity from the ground they own, the shift in the interest rate environment is contributing to the overall market psychology.
3. Farmer buyers. Farmers still buy around seven out of every 10 farms sold. “Farmer buyers play a heavy role in both the direction and the feel of the land market,” Hensley says. “So, when input prices for the coming growing season show large increases, it may cause some people to tap the brakes when they consider a land purchase. It probably won't stop someone from making a land purchase because we all know you buy the farm that you want when it's available, not necessarily when it's convenient, but the impact of higher input prices is very real.”

These shifting factors could mean a change in direction for farmland values. 

“When you put all these things together, I think we’re starting to see a leveling off in the land market,” Hensley says. 

Anything can change at a moment’s notice with the weather, commodity markets, world events and government actions. All will affect agriculture and therefore, the price of farmland, Dickhut adds. The supply of land for sale and how demand holds up over the next months also will be determining factors on land prices. 

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