Land Values After the Corn Surge: Slower Deals, Sharper Math

The USDA expects U.S. corn production to hit 16.8 billion bushels in 2025, about 10% higher than the average of the last two years. Driven by solid yields, that scale hasn’t been seen in years. But strong supply has a downside: corn prices are sliding. The season-average farm price is forecast at $3.90 per bushel, which puts pressure on margins across much of the cornbelt.

That combination: more corn, less revenue matters beyond the farm. It’s already changing how land is valued, how deals are structured, and how lenders underwrite risk. Prices aren’t crashing, but they’re not climbing either. And interest rates, while off the highs, are still keeping pressure on borrowers.

Land Prices Are Slowing, Especially in Corn Country

High yields and big carryovers don’t help landowners when crop prices fall. Producers renting land in the cornbelt are watching margins shrink. Input costs are up. Cash rents were mostly flat. That’s not a great mix.

Nationally, the USDA says cropland values rose 4.7% this year, hitting $5,830 per acre, but that average hides the story. Growth has slowed in row-crop-heavy regions. There’s still firm demand for ranchland, where supply is tighter and the economics are steadier.

If you’re a buyer, there may be chances to get in at more reasonable prices. If you’re selling, expect harder negotiations and fewer bidding wars.

Rates Are Dropping, But Slowly

The Fed’s current outlook has rates easing to around 3.6% by the end of 2025, and 3.4% by 2026. That helps. But most farmers borrow on blended terms, so the relief is limited and still well above the 20-year average.

According to the Kansas City Fed, rates are about 0.5% lower than they were a year ago, but still 1.25% above the long-run average. That means land loans and operating credit are still more expensive than what producers got used to in the 2010s. Some borrowers will benefit from slightly lower rates next year, but not enough to change the game.

Cash buyers still hold the advantage. That’s not new, but it’s more obvious in a tight credit environment.

How Lenders Are Looking at This Market

Lenders aren’t panicking, but they’re asking harder questions. Here’s how we’re talking to clients:

• Refinance only if it solves a problem. Slightly lower rates don’t justify a refi unless it improves cash flow or reduces risk.
• Be conservative on returns. With cap rates around 3–4% and borrowing costs between 5–7%, leverage only works if the fundamentals are solid.
• Keep working capital intact. Even a big crop year can squeeze liquidity when margins are thin. That buffer matters.
• Don’t get distracted by price dips. Land with good water, solid soils, and stable rental potential still holds long-term value.

Brokers and Buyers Should Expect a Slower Lane

Deals are still getting done, just not as fast, and not on yesterday’s terms. Buyers are more cautious. Lenders are tighter. Appraisers are digging deeper. It’s not a freeze. It’s a market that’s slowing down and taking a closer look.

For brokers, this means prepping sellers about what’s ahead: more back-and-forth, longer timelines, and fewer bidding wars. Price still matters, but so do things like lease history, water access, and soil strength, the fundamentals buyers and lenders care about most when cash is tight.

For buyers, this is the moment to sharpen your numbers. There’s value out there, but only if you run realistic models and lock in financing early. The old rules no longer apply, think like a lender before you make an offer. Refinance only if it helps. A slightly lower rate isn’t a reason to refinance, it needs to make a clear difference: lower monthly payments, extended terms, or freed-up working capital Otherwise, it’s not worth the paperwork.

Consider Cap Rate vs. Cost of Capital: If you’re borrowing money, your land’s income needs to beat what that money costs. Say your cap rate (your land’s return) is 3%, and your loan is at 6%. That’s upside down. You’re paying more in interest than you’re earning — and unless you’ve got a solid reason to believe values will rise, it’s not a strong position to be in.

Focus on What Makes Land Hold Its Value: Skip the headlines and dig into the parcel itself:

•         Is the rental demand steady in this area?
•         Can the farm hold its lease rate?
•         What’s the water access like?
•         Is there real, reliable income potential, or just wishful thinking?

Ask Yourself Before You Sign:

•         Will this land earn in year one?
•         Can I hold it if rates stay where they are for another 18-24 months?
•         If prices dip or margins tighten, do I have a buffer, or am I betting on perfect conditions?

Where We Really Are

This isn’t a downturn, it’s a shift. Prices aren’t falling off a cliff. But the easy years are over. Anyone looking to buy, sell, or lend against land in 2026 needs to work harder, ask better questions, and accept that returns might not look like they did five years ago.

Land will keep changing hands, but the terms, the timing, and the thinking behind it are changing, too. Staying sharp on all three is what will keep deals alive.

We expect modest relief on operating and real-estate notes, and it is important to work with a lending partner who understands ag lending and can move quickly. Reliable lenders play a bigger role in whether a deal holds or falls apart. Conterra understands that. We work alongside brokers to offer their borrowers secure financing options. Start a conversation with your Conterra relationship manager to learn more.

About Conterra Ag Capital and the Author

Conterra Ag Capital is a private lender, focused exclusively on American agriculture. We offer a variety of specialized ag loans designed to meet the specific needs of farmers and ranchers nationwide. With a team of experiencerelationship managers strategically located across the country, we provide regional expertise and personalized service to our clients. Whether you’re a seasoned producer or new to the industry, Conterra is committed to supporting your agricultural endeavors. Our people, products, and process-driven approach to lending makes us unique.

About the Author: Taylor Kaus is an experienced finance leader specializing in agricultural lending, asset-liability management, and financial modeling. Taylor joined Conterra in 2020 as a Portfolio Manager. He has an MS and BS in agricultural economics and minors in mathematics and statistics from the University of Nebraska and earned the CFA Charter in October 2024.

Disclaimer: Please note that the information provided in this article is for educational and informational purposes only and should not be construed as financial or investment advice. While we have made every effort to ensure the accuracy and reliability of the information presented, Conterra Ag Capital and its affiliates make no representation or warranty as to the completeness, correctness, timeliness, suitability, or validity of any information contained in this article. You should always consult a qualified financial advisor, tax professional, or other qualified professional for advice on your specific financial situation.