Farmland Values Key to Ag
Published: Friday, November 21, 2025
Farmland values are the saving grace on cash crop farms but could see peril by the end of 2026, according to James Mintert, emeritus professor of agricultural economics at Purdue University, who spoke at the American Society of Agricultural Consultants Conference in Indianapolis on Nov. 4.
Looking to next year, Mintert said the balance sheets are still strong.
"Financial stress is rising among crop farms, but people still have pretty strong balance sheets," he said.
He added that this all hangs on farmland values.
"As long as farmland values are steady or positive, we're probably OK. If you want to look for a trigger in terms of negativity, it's when the land values start coming down," he said.
This is because the "money on the balance sheet is largely in land value." However, he warned that farmland values will begin to suffer if returns continue to be low.
"Farmland values do respond to returns," he said.
But, he said, this does not happen right away because farmland values can fluctuate widely from year to year. Mintert said it would take years of the same trend for farmland values to begin dropping.
"If we see weak returns without corresponding government support at the end of 2026, we could see some softening among land values going into late '26 or even '27," he said.
"The farmland value outlook remains positive," he said, referencing the Purdue Ag Barometer survey he co-leads. "But, if you look at that chart, you can't escape the idea that there's less confidence in the idea that farmland values are going to go up in the next 12 months than what we saw several years ago."
Farmland sales were steady at the end of the summer, with top quality land sales up 3%, average farmland sales up 5.4% and poor-quality land sales up 7.6%. Cash rent increased between 1% and 2% in 2025 over the previous year.
"Over half (of farmers) said they expect cash rent rates to rise moderately in 2026," he said.
Looking at crop production costs, Mintert used pre-COVID as an anchor point.
"We're still well above where we were in 2019," he said.
Fertilizer prices are up, he said. Examples include monoammonium Phosphates (MAP), up 50%; anhydrous ammonia, up 25%; and potash, up 20%. Diesel fuel is up about 20%.
"It is so much riskier to raise crops with these kinds of production costs than it was in that pre-COVID era," he said. "High breakeven levels make farming risky, right? You've got to cover that, and we don't know how it's going to shake out."
As a result, the survey team asked farmers what changes, if any, they plan to make in 2026 to respond to low farm prices. Almost 30% said they would reduce phosphorus, another approximate third said they would adopt lower cost seed traits, and exactly one-third said they would make no changes.
The No. 1 concern in agriculture right now is higher input costs and high breakevens mixed with low crop prices.
Mintert said farm policy is the lowest concern.
"How few people are telling us they're worried about farm policy. That's never changed. No matter when we ask it, we always get less than 10% saying farm policy," he said. "And yet we know they're banking on MFP (Market Facilitation Program) type payments in the farm bill, but they don't seem to worry about it."
He suspects farmers who are relying on MFP-type payments take it for granted that payments will be included in the farm bill, as has been in the past.
The farmer payments from the U.S. government rose from $10 billion to $39 billion between 2024-25.
"Over 80% of producers expect another MFP-type program to be enacted," he said. "So, 83%, basically, are banking on the idea that they're going to get an MFP-type payment if commodity prices don't strengthen. That has an impact on their outlook."
He added that a stronger farm safety net is expected by 32% of producers and a comparable safety net is expected from 57% of producers.
"There's an expectation for pretty strong government support feeding back into sentiment and feeding back into decision-making," he said. "I think that feeds back into farmland values as well."
The survey team asked farmers in October what they would do with an MFP, and 53% said they would use it to pay down debt. Another 25% said they would improve the farm's working capital, 12% said they would update machinery and 11% would use it to cover family living expenses.
"It's clear that there's more financial stress out there, especially on the crop side, than there was a couple of years ago," he said.
This is despite predictions for a near-record year in agricultural gains.
"USDA expects U.S. net farm income to reach the second highest level of this century. This is their update that came out in September, adjusted for inflation, $175 billion for '25, up from $128 billion last year. The peak was 2022 when it was $192 billion," he said. "All the news we hear is negativity."
In the long-term, Mintert said the survey indicates farmers are much more optimistic about the future of livestock than that of crops.
"We can look at what's taking place in crops versus livestock, and that pretty much tells the story. Record high revenues for livestock, and a lot of that coming out of beef, but hogs have had a good turn around as well," he said.
He said 70% are expecting prosperous times in livestock, while just 30% expecting prosperous times in the crop sector.
Looking at agricultural exports, Mintert said "confidence in future growth in exports is one big thing about people's long-run sentiment with respect to what's going to take place in the ag sector."
He said there is increased uncertainty in farmer expectations for tariffs to play out in their favor, but this expectation is still high, at 58%. He noted that this is opposite of the expectation of agricultural economists in the U.S., who largely expect the tariffs to have a negative impact on the ag sector.
In trade, Mintert said the U.S. is not keeping up with Brazil in corn exports. Since 2010, Brazil has brought production up by 3 billion bushels, which is approximately the same amount of corn produced by the state of Iowa.
"I don't see that slowing down," he said.
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