U.S. Cropland Price Rent Ratio Surge

Long term rise shows major changes in land values across agriculture markets

The ratio of U.S. cropland prices to cropland cash rent has changed greatly over the past three decades. In 1998, the ratio stood near 20. By 2025, it had increased to 36. This change shows that farmland prices are growing much faster than rental income. 

This according to two experts at the University of Ohio, Carl Zulauf, Department of Agricultural, Environmental and Development Economics, and Bruce Sherrick, Department of Agricultural and Consumer Economics. 

The experts say that if this ratio had stayed at its 1998 level, the average cropland price in 2025 would be about 40% lower than current values. This shows how strongly the market has shifted toward higher land prices. 

A longer historical review also confirms this pattern. Data from USDA shows that land values compared to rent and service income remained much lower from 1971 to the mid 1990s. Since that time, the ratio has followed a steady upward path. The trend became stronger after the early 2000s and again after 2020. 

Two major periods of growth stand out. The first occurred during the late 1970s when farm income was strong. The second happened between 2004 and 2008, when new fuel policies increased crop demand. After both periods, land prices remained higher even after temporary market corrections. 

Despite careful study, experts have not found any single factor that clearly explains these increases. Crop profits, biofuel use, interest rates, and government payments were reviewed, but none showed strong statistical influence on year-to-year changes. 

Farmland makes up nearly 80 % of all farm assets in the United States. This means rising land prices can strongly affect farmers, lenders, and future land buyers. High land values may make it harder for young farmers to enter the industry and could increase farm debt risks. 

Because land is such a key part of agriculture, experts say more attention is needed to understand why these prices rent ratios continue to grow. Clear answers will help protect farm businesses and guide long-term planning decisions. 

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