By Artem Milinchuk, Founder and Chairman, FarmTogether
According to the USDA’s newly released 2026 Land Values Summary, average U.S. farm real estate (land and buildings combined) rose 3.4% year over year to $4,500 per acre. Cropland climbed 3.3% to $6,020 per acre, and pasture gained 4.2% to $2,000 per acre. It’s the sixth straight year of growth: since 2020, farm real estate values are up nearly 44%, and cropland is up roughly 48%.
Those figures are notable on their own.
What makes them more interesting is the backdrop against which they occurred. Input costs remain elevated, commodity prices have been volatile, borrowing costs are still well above where they sat a few years ago, and agricultural credit conditions have weakened in parts of the country. And yet land values kept climbing.
Explaining that gap means looking past any single year of farm income and toward the underlying characteristics that have long supported the value of productive farmland.
A Fundamentally Limited Supply
The simplest explanation is also the most durable: productive farmland can’t be manufactured on demand.
In some regions, the supply actually shrinks over time as land converts to residential, commercial, infrastructure, or energy use.
Nor is the land that remains interchangeable. Soil quality, climate, water access, location, and crop suitability vary widely from one property to the next.
For permanent crops especially, microclimate, water reliability, and existing orchard infrastructure can make or break a property’s long-term economics. Scarcity combined with real variation in quality is what gives well-positioned farmland its staying power.
Land Values and Farm Economics Don’t Move in Lockstep
The strength in land values is especially striking given the pressure on farm operators right now. The Federal Reserve Bank of Chicago reported this month that agricultural credit conditions in its district weakened in the second quarter of 2026, with the share of farm loans showing repayment problems climbing to its highest level since 2020.
Yet farmland values in that same district were essentially flat year over year.
That’s the key distinction: a farm’s operating economics in any given year and the value of the land beneath it are related but not the same. A farmland buyer is purchasing a long-lived productive asset, and its price reflects expectations about productivity, future income, inflation, scarcity, and alternative uses, not just this season’s crop margins.
That’s a large part of why land values can hold up even as growers face tighter conditions.
The National Average Hides a Lot
USDA’s $4,500-per-acre figure is a useful headline, but there is no single U.S. farmland market. Values differ enormously by geography, land type, and use. Midwestern row-crop ground and a California permanent-crop property don’t behave anything alike, and even neighboring parcels can carry very different investment characteristics.
That matters for anyone evaluating the asset class: a rising national average doesn’t mean every property is a good investment. If anything, as prices climb, disciplined selection matters more, not less.
The questions worth asking are increasingly specific to the parcel: What supports its productive capacity? How reliable is its water? What do historical and expected yields look like? What infrastructure is already there? Is the crop right for the location? Who will operate it? Who will manage it? What capital will it need? And does the expected income actually justify the price? National appreciation numbers can’t answer any of that.
Both a Real Asset and a Productive One
Farmland is unusual among real assets in that its value is tied not just to the land itself but to its capacity to produce something essential–food. That gives it an economic function independent of financial markets, on top of being a physical asset in fixed supply. Over long stretches, that combination has helped farmland hold value across a range of economic environments.
USDA currently forecasts U.S. farm real estate — land and its attachments — at approximately $3.77 trillion in 2026, or roughly 83% of total U.S. farm-sector assets. Land isn’t just one input among many in American agriculture’s balance sheet; it’s most of it.
What This Means for Investors
Another record year is a strong argument for farmland as an asset class — six consecutive years of appreciation, through rate hikes, commodity swings, and credit tightening, is not an accident. It reflects everything laid out above: fixed supply, real productive value, and a role in a portfolio that few other assets can fill.
But rising values also raise the bar for underwriting discipline. As acquisition prices climb, the gap between a good farmland investment and a mediocre one widens. A property with strong water rights, productive soils, capable management, and favorable crop economics can generate very different returns than one without those things, and that gap doesn’t show up in a national average.
This is why the manager matters as much as the market. Sourcing the right property, underwriting its water and soil fundamentals correctly, structuring the operating agreement, and managing it well over a multi-year hold are specialized skills; it’s the kind that separates an attractive-looking acquisition from an attractive investment. Farmland’s resilience makes it a compelling place to put capital. Choosing an asset manager who knows how to find and operate the right properties is what turns that resilience into returns.
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