Farmland Prices Defy Gravity Amid Commodity Drop

Despite a significant drop in commodity prices, farmland values across the United States are surprisingly resilient. Key factors contributing to this trend include a 25% reduction in market supply since 2023 and high demand from both farmers and investors. According to Jay VanGorden of Farmers National Co., the market now values land as a stable, long-term asset, differing significantly from previous years.

Official reports further highlight this trend with the USDA Land Values Report indicating Michigan and Ohio leading in farm real estate value increases. Specifically, Michigan saw a 7.8% increase to $6,800 per acre, and Ohio experienced a 6.7% rise to $9,350 per acre. Notably, a farm in Madison County, Ohio, sold for $19,200 per acre, underscoring the premium on productive land.

Investor interest continues to bolster land values as they seek diversification with tangible assets. With returns of 2% to 3.5% and long-term appreciation, farmland's performance parallels the Dow's over a 50-year period sans volatility, making it an attractive investment.