Statewide farmland prices once again set a new record in 2024, according to the recent “Purdue Farmland Value and Cash Rent Survey.”

According to the survey, which is conducted annually in June, the average price of top-quality farmland is $14,392, up 4.8% from June 2023. Average- and poor-quality farm ground also hit new highs: the average price for average-quality ground is $11,630 per acre, representing an annual increase of 3.7%, while poor-quality farmland averages $9,071 per acre, an annual increase of 4.4%.

“I’m not surprised that average values rose over the past year,” said Dr. Todd Davis, Indiana Farm Bureau chief economist. The first half of 2024 had a more pessimistic price outlook and tighter budgeted margins, and survey respondents indicated lower land values for that period, he explained. However, values were higher in the last half of 2023, as farmers were harvesting record corn and soybean yields.

“Combining an optimistic six months with a pessimistic six months resulted in a slight increase in values in 2023,” Davis said.

A number of forces, such as high interest rates and lower farm incomes, are currently placing downward pressure on prices, but the limited supply of land is keeping prices firm, the survey showed.

“The futures markets and crop budgets for 2025 suggest that profit margins will continue to be squeezed,” Davis explained. “Land values are sticky, which means they adjust to economic changes more slowly. As long as there is demand for farmland with limited supply, then values will be slow to adjust to lower levels.”

The change in farmland prices from 2023 to 2024 varied substantially across regions and quality grades. Among the differences noted in the survey:

• The southwest region experienced particularly high appreciation rates for top and average-quality land.
• The southeast region experienced the most pronounced declines across all three quality grades.
• The central region traditionally shows the highest per acre prices across all three quality grades, but in 2024, the average price per acre for top-quality land in the southwest now exceeds those in the central region. The central region still exhibits the highest value per acre for average and poor-quality land.

While cash rents generally showed little change from 2023 to 2024, they did decline in some parts of the state.

“Cash rental rates negotiated last fall or early spring may reflect the expectations of tighter profit margins for the 2024 crops,” Davis explained. “If farmers have used a lot of their working capital to manage tighter margins, then rental bids may be tempered, reflecting their economic reality of reduced profit potential.”

Indiana per acre cash rent for top-quality land increased by 2.3% to $313, and per acre cash rent for average-quality land increased by less than 1% to $260. The statewide average per acre cash rent for poor-quality land, however, fell by 3.7% to $204.

These statewide averages mask some of the variation across Indiana. Rental rates for all quality grades declined in both the central and southeast regions but exhibited modest increases across various quality grades in other regions.

The “Purdue Farmland Value and Cash Rent Survey” collects responses from professionals knowledgeable about Indiana’s farmland market including farm managers, rural appraisers, land brokers, agricultural loan officers, farmers and Farm Service Agency county office directors. To see the full results, click here.