WEST LAFAYETTE, Ind. – The average values of Hoosier farmland hit record highs in 2025, though the southern part of the state saw price drops of more than 11 percent in some land categories, according to the latest Purdue University Farmland Value and Cash Rent Survey.

Farmland values in the three categories of land surveyed – top, average and poor – set record highs. The average price per acre for top quality land was $14,826, up 3 percent from a year ago. Average quality land, at $12,254, was up 5.4 percent. Poor quality land was up 7.6 percent to $9,761.

Cash rents for the three land categories were up less than 2 percent.

The northeast part of the state had the highest average value per acre for top quality land at $15,909, up 10.6 percent. The northeast also had the highest values for average ($13,791) and poor ($11,032) land.

The southeast saw the lowest values in each category: $10,417 (down 5.3 percent) for top quality land, $8,167 (down 11.7 percent) for average and $,6,083 (down 6.4 percent) for poor. Top quality land in the southwest was $14,233 (down 11.5 percent), average was $10,825 (down 6.5 percent) and poor was $7,488 (down 2.1 percent).

The survey found statewide farmland values increased 4-8.2 percent during the first six months of the survey (June-December 2024). They were up 1 percent or less from December-June 2025.

Respondents were asked to evaluate the importance of 10 market factors that could influence the farmland market, Todd Kuethe, Schrader Chair in Farmland Economics and Purdue professor of agricultural economics, said in the report.

Those factors included exports, inflation and agricultural policy.

“Similar to 2024, current farm incomes are putting downward pressure on farmland values, but the downward pressure appears greater in 2025,” Kuethe wrote. “Crop prices continue to put downward pressure on farmland values, but the positive influence of livestock prices increased relative to the two prior years. As one respondent suggests, ‘the livestock market is helping hold up farmland values.’

“While interest rates continue to put downward pressure on farmland values, the pressure seems to be lower than it was in the recent years. One respondent also highlights the differences in adjustable and fixed mortgage rates this year.”

He said the strongest positive force for farmland prices remains the conversion to residential, commercial or industrial uses, a category added to the survey in 2024.

Transitional land (defined as land moving out of production agriculture and into other uses) averaged $29,043 per acre, down from $30,666 last year.

The survey was done in June for the prior 12 months. Respondents included farm managers, rural appraisers and agricultural loan officers. The survey categorizes farmland based on productivity. The values are for tillable, bare land. The results were released in August.

Respondents were asked where they see values heading for the remainder of 2025. Statewide, they see values increasing 2.8 percent by the end of the year for top quality land, 4 percent for average quality and 6.3 percent for poor.

The July Purdue University-CME Group Ag Economy Barometer also showed some optimism when it comes to farmland values, as the Farmland Expectations Index remained above 100. The July index was 115, a drop of five points from June.

“The fact that this is over a hundred is huge for the agriculture sector because if this materialized and land values are relatively stable or even slightly higher in the next year, that’s really going to ensure that our balance sheets, particularly the long side of the balance sheet, remain relatively strong,” explained Michael Langemeier, director of Purdue’s Center for Commercial Agriculture and a professor of agricultural economics.

“And that’s what you need when you have low net returns like that. If you have a strong balance sheet, you can weather the storm a lot better than if you start seeing a drop in land values. And so, this is good news, not only for bankers, but also for the production agriculture sector.”

Langemeier spoke during the Aug. 5 edition of the Purdue Commercial AgCast.

Average cash rents in Indiana rose to $318 per acre for top quality land, up 1.74 percent from a year ago, according to the survey. Rent values for average land were up 1.61 percent to $264. Poor quality land rents rose 1.53 percent to $207.

“It typically takes several years in a row of low net returns compared to cash rent to drive down those cash rents,” Langemeier pointed out. “People don’t make adjustments based on one year or even two years. If you go back to the 2014 to 2019 period, it took about three years of low net return before we saw that dip in cash rents in Indiana and across the Corn Belt. So that’s part of what I think is going on.”