Right now, land values and cash rents are top of mind for farmers.
Take Iowa for example: Sept. 1 is the deadline for any current farm leases to be terminated unless they are to remain in place for the upcoming year. And about half of Iowa’s crop ground is farmed with a cash rent or crop share lease.
“We continue to be amazed by the resiliency of the ag land market. When we look at the farm economy and commodity markets, and the fact that we can sustain the high land values that we set over the past five years, it’s just pretty amazing,” says Paul Schadegg, president at Farmers National Company. He’s been in professional farm management for more than 25 years, and just a few weeks ago was promoted within FNC to his new role.
Specific for cash rents, the survey data provided by USDA and land grant universities looks back at the previous year. You can read the latest cash rent survey results from Iowa State here.
However, as it’s renewal season, Schadegg says he thinks overall, cash rents will be flat on average.
“Probably, cash rents will be somewhat flat. There might be pockets where we might see some depression because of weather events or just the ag economy,” he says. “But if we continue to see an erosion of commodity markets, that’s a discussion that’s going to have to be made as we go through ‘26 and negotiating into ‘27.”
Schadegg adds a lot of cash rents FNC deals with have evolved to flex leases.
“With these flex leases, you’re protected on the upside and the downside a little bit, so there might not need to be big adjustments, but that does help account for the change in commodity markets,” he says.
Overall Farmland Trends
Schadegg starts with supply and demand. Current farmland real estate listings are down 25% compared to recent highs from 2021 to 2023.
“There are simply more motivated buyers right now than there are willing sellers. So, that has put a somewhat of a funnel on the amount of land being offered for sale,” he says. “When you have these motivated buyers — which are still primarily farm operators — they’re being pushed by investors.”
He says the combination of strong farmer-led demand plus the elevated interest from investors is what’s holding the floor on farmland values. Whereas five years ago, a strong farmland market was solidified by higher commodity prices.
“I think we’re going to reach somewhat of a tipping point where it doesn’t make a lot of sense for a farm operator to buy a piece of land if he can’t cash flow it,” Schadegg says. “If it’s better for him to step back and let an investor buy it, with a pretty good chance he might be able to farm it, they will concentrate their capital expenses on equipment and things they need to run their operation.”
If there’s one factor to watch in the farmland values equation today, it’s the ag economy.
“Profitability for the operator and for the landowner is what’s really going to decide what direction land values go,” he says. “Although we focus most of our attention [at FNC] on representing the landowner, we also have to take into account we’re working with these operators. They’re a very important part of this equation, and if it’s not profitable for them, they’re not going be farming the ground very long. And if it’s not profitable for the landowner, they’re not going to retain ownership.”
As for development pressure, Schadegg shares that has tampered a bit since COVID but is still a factor. Notably, renewable energy development has slowed since the Trump administration took over in 2025.
“Wind especially has experienced the drawback. A lot of projects have been canceled because of the cost to build wind and the infrastructure involved,” Schadegg says. “However, with solar, we continue to see some pretty good interest in building larger-scale solar projects. One of the big reasons for that is a simple statement: it’s the quickest way to the grid.”
He notes while coal-fired power plants or nuclear power plants could take decades for approval, a solar project can be up and going in 18 months.
