Report: Declining crop prices dampening net farm income and ag land values

A new survey from the University of Nebraska-Lincoln shows agricultural land values have declined 2% in the past year. As of Feb. 1, 2025, the average value of a Nebraska acre sits at $3,935. Researchers noted that this is the first decline in six years in the non-inflation-adjusted market value of Nebraska ag land.

Participants in UNL's survey cited lower crop prices, higher interest rate levels and higher farm input costs as all contributors to the decline in Nebraska ag land values. Jim Jansen, an agricultural economist who lead the survey and subsequent report, said these factors have strained farm finances. He said high borrowing costs are putting financial pressures on producers.

"Some of the underlying economic market forces are tending to be reflected in the farmland industry," Jansen said. "We'll have to keep an avid eye on how some of the fundamental forces — that were reported as part of this survey — to better understand the future direction on where things could be headed."

The report concluded that land values differed depending on the land's primary use. Jansen said survey responses showed cropland rental rates trended lower since crop prices declined and input costs remain relatively higher. The rates reflected the lower net farm income in 2024, which dipped 17%. The report estimates that trend will continue this year and that lenders have noted that many farm and ranch operations in the region are tightening.

However, grazing land and pasture rates saw increases, which Jansen said reflects the higher prices for cattle and calves.

"One reason those land values might have trended slightly higher would be the current price levels [and] current prices that livestock producers are receiving, which are quite exceptional compared to where they've been in last several years," Jansen said.

The report found the following fluctuations:

• Gravity irrigated land averaged 5% lower.
• Center pivot irrigated cropland averaged 4% lower.
• Dryland cropland with irrigation potential averaged 3% lower.
• Dryland cropland with no irrigated potential averaged 2% lower.
• Average grazing land and hayland values varied between 1% and 5% higher.

Jansen said understanding market trends and management choices "will be critical" for producers in the coming year.