The US Department of Agriculture (USDA) recently released its latest state-level data on farmland values. The data come from the USDA’s June Area Survey, which asks a rotating panel of producers to estimate the market value of their land. Responses from surveyed farmers are then weighted and extrapolated to generate estimates for entire states. The survey-based estimates are broken down into four categories of per-acre land values:
- Farm real estate, measuring the value of all land and buildings on the farm
- Non-irrigated cropland
- Irrigated cropland
- Pastureland
In Oregon, the per-acre value of farm real estate is $3,720 in the most recent data, representing a $220 (6.3%) increase in nominal terms over the past year (see Figure 1 and Table 1). Note that this is in nominal terms, meaning that it is not adjusted for inflation. In addition, this is based on a revision to the previous five years of land value data. After the release of the five-year Census of Agriculture data, the previous five years of annual land values are subject to revision. Because the 2022 Census pointed to higher land values than revealed by the annual survey, this resulted in an upward revision for Oregon’s 2019-2023 values. For example, the 2023 nominal value that was previously reported as $3,180/acre is now $3,500/acre.
| Farm real estate | Non-irrigated cropland | Irrigated cropland | Pastureland | |
|---|---|---|---|---|
| Value (2024) | 3,720 | 3,010 | 7,650 | 1,050 |
| Change, 2023-24 | 154 | 96 | 253 | 11 |
| % change, 2023-24 | 4.3 | 3.3 | 3.4 | 1.0 |
| 5-year avg., 2020-24 | 3,439 | 2,883 | 7,175 | 1,008 |
Note: All values from previous years are adjusted for inflation to 2024.
It is often informative to examine trends in farmland values over time using real (or inflation-adjusted) values, which account for shifts in values relative to incomes and the prices of other goods. After adjusting for inflation using the Bureau of Economic Analysis’s Gross Domestic Product Implicit Price Deflator, the change in farm real estate value amounts to a $154 (4.3%) increase in 2024 dollars. When compared to its most recent 5-year average, real farm real estate values are up $281 (8.2%). The value of Oregon’s farm real estate continues to outpace inflation, with 2013 being the last time an annual reduction in the statewide real value was observed. In nominal terms, farm real estate values have not decreased since 2009 during the Great Recession.
After decreasing over 2022-2023, non-irrigated cropland value rebounded in 2024, increasing by $96 (3.3%) in real terms to $3,010/acre. The value of irrigated cropland continued its upward trend over the past year, increasing to $7,650/acre, a $253 inflation-adjusted gain of 3.4%. Pastureland value, at $1,050/acre, increased by a more modest 1% over the past year. Relative to their 5-year rolling averages over 2020-2024, all classes of land values point to strong growth in 2024. With few exceptions, the values for all categories of Oregon’s farmland have generally more than kept up with inflation in recent history (see Figure 2).
With aggregated state-level data, it is difficult to tease out any direct cause of the observed trends or year-to-year changes. The strong growth across the board in Oregon stands out compared to other states in the Pacific Northwest (Table 2). For all farmland value categories, Oregon’s growth in 2024 was more than double the growth observed in Washington. With the exception of pastureland in Idaho, Oregon’s growth rates were also higher than those of California and Idaho. In level terms, however, land values in Oregon generally remain below these other states.
| Farm real estate | Non-irrigated cropland | Irrigated cropland | Pastureland | |
|---|---|---|---|---|
| Oregon | 3,720 (4.3) | 3,010 (3.3) | 7,650 (3.4) | 1,050 (1) |
| Washington | 3,620 (1.2) | 1,700 (1.1) | 9,600 (0.8) | 940 (0.4) |
| California | 13,400 (0.4) | 7,700 (2.1) | 20,200 (0.6) | 3,930 (-0.1) |
| Idaho | 4,390 (2.8) | 2,420 (0.6) | 8,950 (1.6) | 2,310 (1.2) |
Note: All values from previous years are adjusted for inflation to 2024. Percentage changes over previous year shown in parentheses.
Using a proprietary database of recent transactions, analysis by AgWest Farm Credit points to several factors that have affected land values in Oregon, including low inventories of land available for sale, strong interest in purchasing land from institutional investors (and buyers from Idaho), and a positive outlook on current-year water availability. The AgWest report also notes the weak relationship between farm profits and land values in recent years, suggesting that investment activity and other factors not directly related to farming are playing an increased role in farmland markets. These factors have bolstered land values despite the relatively high interest rates seen over the previous few years. When interest rates are higher, land values are generally expected to go down, as debt payments for land purchases go up and landowners put a greater discount on the net income they expect to receive from the land in future years. Interest rates are now expected to go down in the near term, suggesting that any downward pressure current rates are exerting on land values will subside. In addition, it is worth keeping in mind that the June survey used to construct the USDA estimates took place prior to the large wildfires that have affected producers in eastern Oregon.
Of course, the fact that Oregon’s agricultural land has continued to appreciate in value has both pros and cons. Investors tend to be attracted to farmland because it generally keeps pace with inflation, which makes it an attractive and relatively safe asset class. Having access to affordable farmland is key for producers, as real estate is the most common source of collateral in farm-related loans. In addition to investment interest, the AgWest report also notes stronger demand from large operators, suggesting that small producers are increasingly at a disadvantage when it comes to accessing both the land and financial capital they need to grow their operations.
This is an annually updated article based on the US Department of Agriculture's farmland values estimates. See the previous version of the article.
