Buying American farms<\/p>\n
Project Description<\/p>\n
I. Core Positioning of the US Farm Market<\/p>\n
The macro-level characteristics of the US farm market are "huge asset size, extremely high landlord-shareholder ratio, and long-term steady increase in land value." The average value of farmland nationwide in 2025 is $4,350 per acre (1 TP4T), an increase of $4.31 per acre (1.91 per acre after inflation adjustment) from 2024. In the near-term performance for 2025, arable land nationwide increased by $2.21 per acre after inflation adjustment, averaging $5,830 per acre (1 TP4T), while ranch land averaged $1,920 per acre (1 TP4T). Net farm income in the US is projected to reach approximately $180 billion per acre (1 TP4T) in 2025, an increase of approximately $291 per acre year-on-year.<\/p>\n
Foreign buyers held approximately $45.2 billion in U.S. agricultural land between 2019 and 2023 (about 2.41 TP3T of all privately and foreign-owned agricultural land). Despite the relatively small historical data, foreign investment in agricultural land has been elevated to a national security level, and several bills for fiscal years 2025-2026 are pushing forward with measures to strengthen reporting and vetting requirements for foreign investors.<\/p>\n
Special Note: At the federal level, AFIDA requires foreign buyers to report their agricultural land interests to the U.S. Department of Agriculture, but this does not automatically prohibit purchases. To date, there is no federal law in the U.S. uniformly limiting the amount or total area of agricultural land owned by foreign citizens. However, more than 24 states have enacted stricter laws restricting the purchase of agricultural land by specific foreign entities (especially entities from \u201chostile states\u201d), and some state bans may directly prohibit foreigners from specific countries from purchasing farmland. Before purchasing, it is essential to clarify which state the farmland belongs to and assess whether state laws explicitly prohibit or require reporting by foreign buyers.<\/p>\n
II. Price Range and State-Level Differences<\/p>\n
The price of agricultural land in the United States is extremely uneven, depending on soil quality grade, irrigation capacity, urban or rural location, and other sources of income (carbon sinks, wind and solar leasing, etc.).<\/p>\n
Regional\/State Farmland\/Pastoral\/Mixed Price Range (per acre) Notes
\nCorn Belt \/ Midwest (Iowa, Illinois, Indiana, Minnesota): High-quality irrigated farmland, 1 TP 4T 8,300\u20131 TP 4T 13,000+. One of the most densely populated areas of farmland value in the United States.
\nIowa (benchmark farm): Mixed crop + pasture: 1 TP 4 T 8,299\/ac (down 1 TP 4 T 252 from peak). Projected to decline by 1.81 TP 3 T in 2025; demand is decreasing but prices remain in high range.
\nNebraska farmland + ranch average price $3,905\/ac (down 1%). Livestock sector supports ranch prices, but crop yields decreased by 16%.
\nSouth Dakota ranches + farmland saw a year-on-year increase of 7.91 TP3T, while ranches saw an increase of 12.81 TP3T, driven by strong demand from the livestock industry.
\nWyoming ranches saw an 8.71 Tb3T increase in value over one year, driven by land scarcity and the premium associated with outdoor lifestyles.
\nIn California's Central Valley, irrigated farmland accounts for 9,830+ TP4T\/acre ($\/acre = 2,450 acre of pasture). High-profit crops such as almonds, grapes, and tomatoes are being grown, with the pasture-to-farmland ratio expected to quadruple by 2025.
\nWestern semi-arid region (New Mexico and parts of Texas): Irrigated\/non-irrigated pastures, 1 TP 4 T 1,500\u20131 TP 4 T 4,000. Relying on livestock and limited crops, land prices are moderate.
\nCentral Great Plains (Kansas, Oklahoma) Winter wheat\/pasture: 1 TP 4 T 2,000 \u2013 1 TP 4 T 6,000 (Varying)
\nSoutheastern (Georgia, Alabama, etc.) Pine forests\/mixed forests $3,000\u2013$7,000 Woodland and mixed crops
\nMid-Atlantic\/Northeast small farm\/lifestyle $10,000+\/ac Including New York and Pennsylvania, high-competition lifestyle-oriented areas<\/p>\n
2026 Forecast Trend: Farmland prices are expected to remain generally stable, with slight declines possible in Iowa and North Dakota, but gains in other states will offset the overall slight increase (0.%\u20132%). Commodity income and low loan interest rates support buyers' purchasing power. A tight supply of high-quality farmland and a strong pool of cash buyers will continue to maintain price stability.<\/p>\n
III. Three Core Forms of American Farms<\/p>\n
Category 1: Bare Land<\/p>\n
Pure farmland, excluding residential buildings, containing only agricultural barns or irrigation facilities, with no residential land. Suitable for natural capital investors seeking diversified risk. Returns come from cash rental (providing stable cash flow to agricultural operators) or reservations for future carbon sink\/solar energy development. Significant price advantage, as rent is locked in long-term by the Farm Credit System and is predictable. Purchasing bare land is the simplest transaction, less affected by AFIDA and state-level farmland restrictions (depending on the state's sensitivity), and avoids liability for renovations to historic buildings.<\/p>\n
Category 2: Operating Farms<\/p>\n
The most traditional American family farm model involves the owner directly cultivating crops or managing livestock, generating operating income, receiving CAP government subsidies, and natural capital project income. Typical farm sizes range from 100 acres to over 2,000 acres, and include farmhouses, barns, grain silos, machinery, etc., with prices ranging from $1 million to $8 million per TP4T. This model is suitable for professional farmers, buyers with an agricultural background, and rural enthusiasts. This type requires expertise but full eligibility for subsidies (provided citizenship requirements are met).<\/p>\n
Category 3: Mixed-use rural estates (mixed Equestrian\/Hunting\/Farm Estate)<\/p>\n
Most are upgraded residences (large mansions) with a small amount of farmland (pastures, haystacks), primarily targeting lifestyle buyers. The main income comes from land appreciation, agricultural rent, and hunting rentals, avoiding the complexities of active agricultural management.<\/p>\n
IV. Key Market Developments in 2026<\/p>\n
1. Farm income is at a five-year high, with net farm income approaching $180 billion. Gross profits in key sectors such as grains, soybeans, and livestock are supported by trade aid, subsidies, and a strong livestock sector by 2025. However, input costs remain high, and the decline in net crop income is partially offset by livestock (especially beef).<\/p>\n
2. Farm Credit System borrowing costs are near historic lows. Lower lending rates from the FCS, commercial banks, and the USDA are encouraging bond market investors to enter the farmland market, making agricultural financing more accessible in 2026. The debt-to-asset ratio is projected to remain at approximately 13% throughout the year, lower than the average leverage of commercial real estate.<\/p>\n
3. Foreign buyers face an increasingly stringent dual regulatory environment from both the federal and state levels. At the federal level: AFIDA reporting reforms have been strengthened, and CFIUS has increased its scrutiny of agricultural land transactions (especially those exceeding $5 million or 320 acres). At the state level: layered restrictive legislation\u2014more than 24 states have prohibited or severely restricted entities or individuals from countries such as China, Russia, Iran, and North Korea from owning agricultural land within their states, with regulations based on the area of the agricultural land and the location of the property. A newer legislative trend is restricting direct purchases of agricultural land by foreign governments and individuals and entities from \u201chostile states,\u201d or requiring pre-transaction registration and approval. This significantly increases the due diligence burden on foreign buyers.<\/p>\n
4. Farmland values rose, but transaction volume declined. Farmland sales in Iowa decreased by 161 TP3T in 2025, with fewer land listings and less bidding. Sellers postponed sales due to uncertainties, causing high-priced farmland to completely exit the market.<\/p>\n
5. Natural capital and the carbon market are becoming new drivers of farmland value. The Farm Act of 2026 will make evidence-based practices (soil testing, no-till farming, cover crops, etc.) a qualification requirement, and the EQIP grant will allocate $1.4 billion and the CSP grant will allocate $1.4 billion, which will further enhance the premium value of farmland that adopts high standards.<\/p>\n
6. Estate tax exemption permanently increased to $15 million per person. The One Big Beautiful Bill Act permanently increases the federal estate and gift tax exemption to $15 million for single individuals and $30 million for married couples, adjusted for inflation, starting in 2026. For the vast majority of American family farms, the federal estate tax is no longer a major financial threat, increasing the attractiveness of farmland as a vehicle for intergenerational wealth.<\/p>","protected":false},"excerpt":{"rendered":"
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