Farmland 2025 in Review — and What It Means for 2026 Investors

As 2025 draws to a close, the U.S. farmland market stands at a natural inflection point. Following the unusual mid-cycle dip in 2024^[1], this year brought stabilization across values, stronger operating income, and heightened institutional focus on the asset class. From policy developments to headline M&A activity, 2025 highlighted farmland’s enduring resilience and its continued evolution within the broader real-asset universe. Below, we recap the key developments that shaped the sector — and what they may signal heading into 2026.

Macro and Market Overview

Farm Income Rebounds

After two years of compressed margins, 2025 marked a meaningful recovery for U.S. agriculture. According to the USDA’s most recent projections, net farm income is expected to approach ~$180 billion, representing a roughly 29% year-over-year increase. In inflation-adjusted terms, this places 2025 among the strongest income years of the past decade.

Drivers included higher average commodity prices across key row crops, easing fertilizer and fuel costs, and improved supply chain availability following the disruptions seen in 2023–2024. For investors, stronger operator income generally supports more stable lease performance and reinforces farmland’s role as a cash-flow-producing real asset capable of weathering economic cycles.

Land Values: Slower, Steadier Growth

The USDA’s 2025 surveys show U.S. cropland values rising to an estimated ~$5,830 per acre, an increase of approximately 4–5% year-over-year. This marks the fifth consecutive annual increase, though at a more moderate pace than the growth seen in 2021–2022. This period of normalization reflects cooling but resilient demand, limited acreage supply, and long-duration ownership dynamics. Farmland’s value continues to compound gradually, supported by utility value and scarcity rather than leverage.

Rates, Financing, and the High-Yield Environment

Even as the Federal Reserve initiated its first rate cuts in late 2025, borrowing costs remain relatively elevated. Farmland, however, has stayed comparatively insulated. U.S. farm sector debt-to-asset ratios remain near historical lows (~13%), well below typical leverage levels in commercial real estate. Conservative financing structures, lease-based income, and low correlation to interest-rate cycles have contributed to this stability.

Capital Market Activity and Structural Shifts

2025 brought a notable rise in institutional participation, with new structures and headline transactions expanding visibility and investor access.

Nuveen Launches a U.S. Farmland REIT

In Q3 2025, Nuveen introduced a private U.S. farmland REIT targeting a multi-billion-dollar portfolio of leased cropland and permanent plantings. Designed with periodic NAV pricing and structured liquidity windows, the vehicle reflects growing demand for hybrid real-asset structures. While the REIT remains a private-market product, its launch underscores farmland’s increasing inclusion within diversified real-asset allocation frameworks.

WisdomTree Acquires Ceres Partners

Mid-year, WisdomTree announced the acquisition of Ceres Partners, a prominent farmland manager overseeing more than 500 properties. The transaction expands farmland’s reach into public-market distribution channels and reflects growing competition among asset managers seeking scale. It also signals a broader shift toward greater standardization and technology-enabled oversight across the sector.

Other Capital Flows and Platform Activity

Outside the largest institutional announcements, accredited-investor platforms, family offices, and intermediaries maintained strong interest in farmland throughout 2025. While deployment remained selective given rate conditions and pricing dispersion, investor demand for income-producing, inflation-hedging real assets continued to support farmland’s visibility.

FarmTogether is among the limited number of accredited-investor platforms providing direct permanent cropland exposure, offering an access point to the institutional momentum by enabling participation from individual investors. This approach fills a critical gap in the market, enabling investors of varying profiles to access professionally managed farmland portfolios with institutional rigor.

Policy and Sustainability

2025’s significant legislative package — often referred to as “The One Big Beautiful Bill” — introduced several provisions relevant to farmland owners, operators, and long-term holders. These included capital gains deferral mechanisms for farmland kept in agricultural use for a defined period (subject to eligibility), expanded conservation and water-efficiency credits, and increased federal investment in rural broadband, water storage, and climate resilience.

These measures reinforce the strategic importance of U.S. agricultural land and illustrate increasing alignment between agricultural economics and environmental policy. The incentives focus broadly on long-term productivity, sustainability, and rural economic resilience.

Performance and Resilience

After the rare negative total return for the NCREIF Farmland Index in 2024 (–1.03%)^[2], preliminary 2025 readings point to a return to positive income and appreciation trends^[3]. Income returns — historically in the 2–5% range — remained stable^[4], and several regions saw appreciation supported by stronger operating revenues and renewed demand.

Farmland’s resilience continues to stem from its intrinsic utility value: productive land generates essential food, fiber, and fuel across economic cycles. This fundamental demand contributes to long-term value durability, independent of short-term macro fluctuations or leverage conditions.

Looking Ahead: What 2026 May Bring

While no forecast is guaranteed, several factors are likely to shape how farmland performs in 2026 across income, valuations, and regional dynamics.

• Income Stability in a Normalizing Cost Environment: Operator margins may remain supported by moderated input costs and steady demand across major crops. Income-return profiles could continue to reflect long-term lease structures and revenue stability, though variations across crop types are likely.
• Selective, Not Uniform, Appreciation: Land value trends may diverge more noticeably. Regions with secure water rights, strong operational infrastructure, and resilient specialty crop markets may see firmer pricing, while areas facing commodity pressure or elevated drought risk may experience slower appreciation.
• Influence of Rates on Transaction Activity: Even with gradual rate reductions, borrowing costs are expected to remain above the prior decade’s averages. This may keep transaction volumes measured and support disciplined pricing, influencing the pace at which appreciation occurs.
• Continued Institutional Tailwinds: New REIT structures, M&A activity, and increased attention from asset managers may contribute to deeper capital pools, greater transparency, and more standardized reporting — factors that can influence liquidity dynamics and long-term price discovery.
• ESG and Regenerative Adoption as Emerging Value Drivers: As verification frameworks mature, properties with water-efficiency improvements, soil-health programs, or regenerative practices may see increased leasing competitiveness or valuation differentiation.
• Policy-Driven Incentives and Capital Allocation: Federal and state programs supporting water infrastructure, conservation, and climate resilience may indirectly shape regional performance by influencing operator economics and long-term productivity.

Farmland’s Enduring Appeal

The U.S. farmland market in 2025 reflected stabilization, strengthened operator margins driven by higher projected farm income and moderating input costs, and significant institutional engagement. Across a landscape defined by rate volatility, shifting trade dynamics, and evolving climate policy, farmland continued to demonstrate characteristics investors often seek: steady income potential, long-term capital preservation, and historically low correlation to traditional markets.

As 2026 approaches, many investors remain focused on real assets capable of withstanding macroeconomic uncertainty while providing tangible, productive value. Farmland, grounded in essential output and constrained supply, continues to stand out as a long-duration asset with enduring relevance.