Farmland Value Update - Winter 2023

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Another harvest season is rolling, and farmland sales across the Midwest continue to occur. It’s not the same “go-go” market of 2022, but the market is certainly not weak. Case in point, you don’t have to look very hard to find activity at or above $15,000/acre for the best quality land in most Midwestern states. Even in areas with inconsistent rain and disappointing crops, there seems to be ample liquidity from recent year profits that continues to power many land purchases. Higher interest rates and lower grain prices are both headwinds that have added pressure to the 2023 land market. However, lower sale volumes – thereby supporting demand for land – and lower input prices for 2024 production – thereby supporting potential margins for next year – are both helping to offset the pressure. Full harvest results will influence land sales between now and year-end. But for now, the land market seems to be holding its own, as evidenced by the multiple market surveys referenced below.

Iowa Farmland Leveling Off

The Iowa Chapter of the REALTORS Land Institute reported a minor decrease of -0.2% in land values on a statewide average for the March 2023 to September 2023 time period. This is following the September 2022 to March 2023 time period that showed a 0.8% increase, giving a year-over-year increase of 0.6% for the State of Iowa. After seeing double digit increases in land values for 2021 and 2022, the land market has leveled off in 2023.

Illinois Remains Steady

According to the Midyear Land Values Survey sponsored by the Illinois Society of Professional Farm Managers and Rural Appraisers, farmland values across Illinois showed overall stability for the January to July 2023 period. The survey found that 44% of respondents expect farmland prices to remain unchanged for the rest of 2023, while 36% expect a modest decline of 1-3% through the end of the year.

Nebraska Land Holds Stable

The University of Nebraska’s survey released in early 2023 indicated a robust 14% annual increase in farmland values statewide. However, that rate appears to be slowing, as the Kansas City Federal Reserve’s late summer survey found that non-irrigated cropland values in the region were up just 5% from the previous year. Similar to other regions, the Fed bank referenced the idea that the potential pressure from higher interest rates is just beginning to take effect.

Minnesota Values Continue to Climb

The Minneapolis Fed’s Q2 survey conducted in July 2023 shows a year-over-year decline in farm income, with a slowing increase in farmland values across the region. While incomes slipped slightly, loan demand also fell as repayment rates rose, pointing to robust liquidity and capital reserves among farmers. The survey indicates falling incomes have not yet materially impacted land values or borrowing activity, although they expect loan demand to grow in late 2023 in areas with poor crop production.


In summary, the Midwestern farmland market maintains a position of stability. When we look back on 2023, it is likely to be the year where we see and remember a “flattening” of the market. Higher interest rates and lower commodity prices are the primary pressure points that were added to the 2023 market, but lower sale volumes and comparatively lower input prices for the 2024 crop year, are seemingly helping to offset at least a part of those pressures. With strong profits and still plenty of “dry powder” available from recent years, we believe stable farmland prices will continue into early 2024.


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