Real Estate

44 Million Acres: The New Frontier of Farm Consolidation and Growth

Tue, 10 Feb 2026 18:01:18 GMT

At the 2026 Top Producer Summit , Farm Journal Intelligence unveiled new farmland insights derived from predictive modeling and deep-data analysis. The research focused on the shifting landscape of land acquisition, identifying which operations are at risk of consolidation, who is positioned for growth and where the most significant opportunities lie.

Here are the six primary findings for farm businesses:

1. Scale Does Not Immune Operations from Consolidation.

(Farm Journal)

While smaller operations face the highest risk — with 58% of small farms “at risk” for sale or acquisition before 2030 — size is not a complete safeguard. Research shows the risk of consolidation or ownership transfer never drops below 27%, even for the largest operations. Furthermore, crop diversity made minimal impact on these odds; the likelihood of transition remains constant whether a farm produces one crop or more than 11.

2. Geography Trumps Diversification.

(Farm Journal)

Regional location is increasingly becoming a primary driver of financial success, often outweighing the benefits of operational diversification. As regional market divides grow, farmers and ranchers are finding that local market conditions and individual circumstances dictate their trajectory more. State-level or even county-level effects are more indicative of their situation than national trends.

3. The 44-Million-Acre Transition.

(Farm Journal)

Nearly 15% of American cropland is projected to change hands within the next three years, driven by generational transfers, continued consolidation and economic pressures. Farm Journal data identifies the Midwest as the epicenter of this shift, with roughly 12 million acres likely to transition. Nationwide, that total reaches a staggering 44 million acres.

4. Mapping the “Sweet Spot” for Expansion.

(Farm Journal)

By plotting cost per cropland acre against the volume of land likely to transition, clear opportunities for expansion emerge. For producers looking to grow their footprint, the most viable opportunities are currently concentrated in Kansas, Texas, North Dakota, Missouri, and Oklahoma, according to this research.

5. Integrity Is the Top Currency in Rental Markets.

(Farm Journal)

When more than 400 landowners were surveyed about tenant selection, integrity ranked as the most critical factor. Interestingly, age was reported as the least important factor. For producers looking to secure rented ground, a reputation for character and experience outweighs both seniority and youth.

6. The “Willingness” Factor in Technology.

(Farm Journal)

Producers most inclined to expand share a common trait: a higher comfort level and rate of adoption with technology. Crucially, this is not necessarily tied to technical skill or existing expertise, but rather to mindset and action. The most growth-oriented producers are defined by their willingness to try new technologies rather than their current mastery of them.

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New Trends Are Emerging In The Farmland Market

Fri, 20 Dec 2024 22:32:57 GMT

It’s been an interesting few years for the farmland market, with inflation and interest rates largely driving trends. But this year is different as new trends are emerging in the farmland market, including lower farm income and uncertainty surrounding tariffs and trade , the farm bill and renewable fuels/energy .

“Two years ago, we really focused on interest rates. That was a pretty easy conversation. And then last year we focused on inflation, and frankly, that was a pretty easy conversation too. We knew that things would somehow eventually calm down a bit,” says Bruce Sherrick, professor and director of the TIAA Center for Farmland Research. “This year, we focused a little bit more on income. To be honest, that’s a lot tougher to predict.”

People’s Company 2024 Land Values

(Peoples Company)

Considering the combination of lower commodity prices and farm income, it makes sense that land values have softened in 2024. What might be more surprising, however, is that they haven’t declined more.

“When you look at just commodity prices alone and interest rates alone, I think a lot of folks would have anticipated that land values would probably soften more so than what a lot of the survey data and the USDA numbers are showing,” says Steve Bruere, president of Peoples Company. “So, why aren’t land values declining to the degree that maybe your spreadsheet might show that they would? The are themes such as ecosystem services, natural capital, wind and solar, carbon.”

Iowa State University’s (ISU) recent land value survey found farmland values in the state decreased 3.1%, or $369, to $11,467 per acre, and 75 of Iowa’s 99 counties showed a decrease in land values. Bruere believes the decline of land values in the state might be closer to 10% to 15%, based on transactions he’s seen, and there’s likely still farther to go.

“The markets have probably softened more than what the Iowa state survey would reflect,” he says. “I think everybody is incredibly bullish about where the land markets headed over the long haul, but in the short term, there’s some adjustments happening around commodity prices and interest rates.

This sentiment is echoed by respondents to ISU’s survey, as 58% expect a decline in values over the next year while 80% believe land values will increase over the next five years.

“This long-term confidence aligns with expectations of more stable or slightly rising corn and soybean prices, suggesting that while the short-term outlook may be challenging, the market’s foundation remains strong,” says ISU survey author Rabail Chandio.

A Regional Look

Peoples Company 2024 Returns by Region

(Peoples Company)

Looking at the farmland trends by region reveals a few interesting connections.

“When you start to look at some of the stability of returns, you can start to call out those regions where you have more diversity in crop production. The Pacific Northwest jumps out, whereas in the corn belt, you can see a bit of a tracking along some of those commodity cycles,” says Dave Muth, Peoples Company’s director of capital markets. “In 2025, you can plan on farmland across different regions and different systems needing to be looked at more independently.”

Livestock’s role in a region’s income also becomes clearer.

“In 2024, animals and livestock products exceeded, in terms of receipts, crops for the first time. This is a major change because when commodity prices go down, feed prices for livestock also go down,” Sherrick says. “This is having differential effects in supporting farmland values moving forward again.”

3 Takeaways For The Future
The Peoples Company team gives the following predictions for what to expect in the farmland market moving forward.

Land values are increasing long term, but the next year could be more unpredictable.
Record-breaking sales will likely be a bidding war between neighbors who wanted the land instead of a new trend.
Voluntarily bringing land to market just because a neighbor had a huge sale seems to be over - at least for now.

“I wouldn’t be surprised to see a little bit of a pullback, but I think the pullback will still need to be precipitated by some policy or world event that is not present now,” Sherrick says. “Otherwise, I would expect it to be essentially flat. There’s a lot of folks who would like to own farmland still, so I’m not expecting a huge correction.”

3 Trends to Watch in the 2024 Land Market

Tue, 06 Feb 2024 16:22:15 GMT

Will the year ahead bring higher peaks, a flat plateau or dip into a valley for farmland values? Jim Rothermich of Iowa Appraisals shares his insights in how the red-hot land market we’ve seen the past few years is showing signs of cooling off.

“The hyper volume of acres going to auction started happening in mid-2021 and kept going to 2022. As we got into 2023, the first quarter had pretty aggressive numbers going to auction, and then it started slowing down,” he says. “The frequency of $20,000 an acre or more really slowed down in the spring and summer.”

Drought, Interest Rates and No Sale Auctions
As for 2024, Rothermich says the level of drought already occurring in much of the country has potential to impact the volume of land sales.

“[Drought] makes people pull back,” he says. “It seems like with crop insurance we don’t see those valleys as much on a dry year, but we haven’t had a major drought since 1934 or 1936 – so we’ll have to see.”

Another factor to watch continues to be interest rates.

“People call in and say they’re interested in a farm, then talk to their banker and say ‘we’re out’. That’s shrinking the buyer pool, and it’s affecting the market,” Rothermich says. “What I’m hearing from my banker friends is interest rates will eventually go down to 5% to 6%, and that’s going to be the normal. Those 3% to 4% interest rates are a thing of the past.”

He adds there have been several no sales at auction recently, which could impact the market as well.

“We’re going to continue to see some records set in some counties, and we’re going to continue to see sales. But I think the auction companies are going to be more selective in what they take to auction because of the chance of a no sale,” Rothermich says. “They’re going to do more traditional listings. So, I think the volume is probably going to go back to normal.”

Cash Rents Predict Strength in 2024 Land Values
When it comes to cash rents, Rothermich says values remain strong despite lower commodity prices.

“Some of these recent cash rent auctions, there’s just no weakness in it at all,” he says. “A lot of them are three-year terms, so it seems like those tenants are forecasting the next three years to be pretty decent.”

This is a trend he predicts will help keep the overall land market steady in the year ahead.

“I see the market gradually cooling off in 2024,” he says. “It’s not going to fall out of bed because these rents are too strong. I think it’s just going to slowly settle down and go back to normal.”

To hear more from Rothermich, listen to this episode of the Top Producer podcast.

Farmland Values Are Holding Up, But There Are Hints of a Reset At a New Level

Farmland Values Remain Strong, Expected To Stabilize In 2024

Important Differences Between Today and the 1980s Ag Economy

Wed, 01 Nov 2023 18:07:57 GMT

Indiana ag lender Joe Kessie graduated from Purdue University in 1983 with a degree in ag finance – during the height of the 1980s farm crisis.

“I think only about 25% of the graduates in the ag school had jobs at the time of graduation,” he says.

Though it was a tough time to be starting out in the industry, Kessie (who is now retired) is grateful to have experienced so much early on in his career.

“I always tell people I was fortunate to start when I did because I got to see everything that could go wrong in banking and ag finance during that farm crisis,” he says. “It was a little easier to be objective because I hadn’t made those original loans and was working with the clients to get through that.”

He was also able to help customers make the best of their situations.

“In the late ‘80s, early ‘90s, there were tremendous opportunities to take advantage of. Ground was down to $1,000 an acre or less in our area,” Kessie says. “I had some operations that were making adequate money even though their net worth still might have been going down with deflation. I helped them take advantage of some of those opportunities and I formed long term relationships.”

Insights on What’s to Come
Though inflation is currently high, Kessie doesn’t expect a repeat of what he experienced in his early career for three main reasons.

“Back in the ‘70s or early ‘80s, all the farm rates were all variable. When rates skyrocketed, basically all the debt on the balance sheet went up,” he says. “Today, about any kind of term debt is fixed at pretty attractive rates. The higher rates today are affecting operating and if you make a new purchase, but the other debt on the balance sheet is not affected.”

He also shares the overall farm balance sheet and management level is in better shape than it has previously been.

“The farm balance sheet was pretty leveraged in the ‘70s versus now it’s not,” Kessie says. “Overall, the management level is definitely better today than it would have been in the 70s. A lot of the inefficient operations, unfortunately, didn’t make it.”

Investment funds are another reason the state of the current ag economy differs from the 1980s.

“There’s a lot of farm cash buyers but then there’s also a strong interest in investors and investor funds,” Kessie says. “None of that was there in the ‘80s to support the market. The sales we’ve seen in real estate this year continues to go up, and demand is very strong.”

To hear more about Kessie’s reflections and expectations, check out this episode of the Top Producer podcast.

All Signs Lead to South Dakota

Wed, 31 May 2023 15:00:54 GMT

From labor to rising input costs to tight margins, the list of challenges producers face is endless. However, when it comes to their biggest challenge, regulatory pressure is likely at the top of the list.

Out west, in states such as California, the dairy industry has been impacted by overtime labor rules, rigorous permitting processes and the shortage of water. As a result, cows are migrating toward the center of the country.

“That’s where the dairy processing capacity expansion is primarily happening, and that’s where the cows are heading,” says Roland Fumasi, head of RaboResearch Food & Agribusiness for North America. “It’s being driven partially by all the water challenges in the west.”

But where are the cows going? According to the latest March USDA Milk Production report, South Dakota continues to show impressive growth in terms of dairy cattle. The state added another 13,000 cows and 24 million pounds of milk year-over-year.

The processing growth has led to opportunities not available in other regions, says Evan Grong, sales manager for Valley Queen.

“We anticipate growth in the I-29 corridor will be much slower in 2023 and 2024 as there are no plans for additional capacity,” he says.

“However, due to our expansion project, Valley Queen expects approximately 25,000 additional cows will be added in 2025 and 2026.”

Three Key Drivers

Grong says three main factors attract producers to South Dakota.

“We attribute the current and projected growth in the I-29 region primarily to access to feed production, abundant groundwater and dairy processing investments,” he explains.

South Dakota has grown in number of cows and in pounds of milk produced. Currently, the state has 150 permitted class A farms.

“Like many areas, we have seen a decline in the number of overall farms. But, we are unique in that our cow numbers have risen from fewer than 80,000 in the early 2000s to around 200,000 right now,” says Tom Peterson, executive director of South Dakota Dairy Producers.

Move to I-29

Dairy producer David Lemstra searched for the perfect place to milk cows for a decade. Three years ago, he and his family moved from central California, where they had dairied for more than 40 years.

“Three things led us to call South Dakota home,” he says. “Feed, permits and processing.”

The process to find a new place to milk cows wasn’t easy for Lemstra — it took nearly a decade of research.

“We looked at quite a few states,” he says, adding once they got serious, Iowa and South Dakota floated to the top. Today the Lemstras milk 4,000 cows near the Sioux Falls area and ship to Agropur.

Regulatory Pressures

Lemstra moved east for several reasons, including California’s long-term drought and poorly managed state resources.

“A combination of a lot of poor decisions and poor state political management played a factor in our decision to move,” he says.

Labor is another challenge dairy producers face in the Golden State, but Lemstra discovered the labor situation in South Dakota to be much better.

“Some of the locals say labor is very hard, but they don’t know how hard it can potentially get,” he says. “Out here, there are employees who want to work on farms.”

Lemstra believes South Dakota is set up as a business-friendly state.

“California has the table tilted toward the employee, and the employer must manage through the regulations,” he says, sharing California’s overtime rule added insult to injury.

“It’s not one blow that took us out of California,” he says. “It was death by 1,000 cuts.”

Learning Curve

A big adjustment for Lemstra and his family has been getting used to milking cows in South Dakota’s varying temperatures.

“From severe heat to severe cold to everything in between, this is a new learning curve for us,” he says. “We relied on people who were here already to copy dairy facility designs.”

In South Dakota, Lemstra has agreements with local farmers to grow feed for his dairy.

“I don’t have to worry about that,” he says.

Although, the biggest catalyst that ultimately drove Lemstra and his family to South Dakota was schools and churches.

“We hold those very high, and that was one of the reasons we moved to this area,” he says. “The South Dakota, Iowa and Minnesota dairy community is a fun and tight-knit community.”

Plans for Growth

It’s hard to believe not many years ago, South Dakota wasn’t included in the top 20 dairy states in the country. Today, the I-29 corridor is bustling with cows and a supportive infrastructure that embraces growth.

“We’ve been building up to it to this point, but it comes down to the business-friendly climate that South Dakota has extended to the dairy industry and to all of ag,” says Deb Wehde, a field representative with Agropur. “This has allowed the industry in our state to grow and thrive.”

In 2019, Agropur tripled the size of its Lake Norden, S.D., plant, going from 3 million pounds to 9 million pounds. Wehde says Agropur conducts growth objective analysis to help meet their customer needs and understand their market needs in the future.

“We want dairy producers who are willing to partner with us,” she says. “We have environment, social and governance [ESG] principles, so we need good partners to help us achieve those goals.”

Another factor vital to growth is ensuring a good labor base, which Wehde says spells a win for everybody involved.

In South Dakota, she adds, the dairy industry works alongside the government to find solutions for sustainability goals rather than forcing burdensome regulations with negative impacts.

“We have a great relationship with our producers because we are working toward a common goal,” she says.

Like others, Wehde is optimistic about South Dakota’s dairy future but says economic factors, such as inflation, will impact future management decisions.

“What is inflation, and all these other pressures, going to do to us?” she asks. “Something bigger than the dairy industry itself can impact the industry.”

Travel through South Dakota and you can easily see the open land, which has access to water to grow feed and plentiful processing capacity for new milk. As a business-friendly state that supports dairy, South Dakota has certainly rolled out the welcome mat for producers.

Trusteed IRAs: why they are popular, who should consider them, what benefits they offer

Fri, 23 Sep 2022 20:01:45 GMT

Q: I’ve heard a lot about trusteed IRAs. How do they differ from traditional IRAs?

A: Simply put, trusteed IRAs offer potential tax benefits of traditional or Roth IRAs with the protection and control of a trust. They provide tax advantages that stretch into the future and offer the ability to control how, when and in what amounts assets are distributed. Trusteed IRAs have become more popular given some of the inherent limits of traditional IRAs and the growing prevalence of self-directed retirement accounts combined with the decline of pension plans. They also are more cost-effective than setting up a trust and are generally more compliant with tax laws.

Q: Who should consider a trusteed IRA?

A: There are several reasons why someone should consider a trusteed IRA, the most consequential of which is if an owner has an interest in controlling assets and realizing tax benefits beyond their lifetime. This can mean an owner is concerned with the financial discipline or sophistication of heirs.

Other reasons include if an owner remarries and wants to provide for a current spouse as well as children from a previous relationship and/or is concerned about IRA management in the event of incapacitation.

Q: I’m in the middle of estate planning. How can a trusteed IRA help with the process?

A: They can help process if only to preserve the potential tax-advantaged accumulation of IRA benefits to pass on to heirs. Under traditional or custodial IRAs, a beneficiary is required to withdraw at least the Required Minimum Distribution (RMD) each year. However, a beneficiary may withdraw additional amounts, for any reason, at any time—and incur possible fees or tax penalties.

Additionally, owners can restrict payouts to a beneficiary to the RMD, enabling it to operate as a spendthrift trust. At the owner’s death, the trusteed IRA would be automatically split into separate accounts for individual beneficiaries, with distribution terms defined for each account.

Another benefit is that estate plans don’t need to be rewritten or updated; trusteed IRAs can be added independent of an estate plan to protect IRA assets which legally pass outside of wills.

Q: Is a trusteed IRA better suited to farmers or owners of farm assets?

A: Not expressly, but a trusteed IRA can play an important role in legacy planning and preservation of farm assets over multiple generations. Given the growing generation gap among farming families, trusteed IRAs could be a way help preserve farm family values over generations from beyond the grave. Moreover, as farm economics continues to change, farmers may find value in the highly customizable nature of trusteed IRAs. In the event of a divorce in the family, for example, assets can be made to not leave the family’s bloodlines.

Q: Are there any downsides to trusteed IRAs?

A: Given that a trusteed IRA requires a corporate trustee, it’s harder to change ownership and family members cannot be named as trustees. Not all financial institutions offer trusteed IRAs so they may not be widely available to interested clients. Additionally, while they offer greater customization and more control, trusteed IRAs carry some limits. To have the highest level of customization and control, a trust would need to be created.

Please send questions, comments or requests to address a topic or issue to Rees Mason at rees.mason@ml.com.