Editor’s note: This story is part of an ongoing series called “Smart Moves for 2027,” which outlines steps to guide farmers in the coming year.
Iowa farmland prices confounded conventional wisdom in 2026, considering sticky high input prices and slumping crop markets before this year’s preharvest rally.
A Farm Credit Services of America analysis of Iowa farmland values for the first half of 2026 showed prices tallied $168 per point on the Corn Suitability Rating 2 index.
That’s steady with 2025 levels and about 5% below the 2023 peak of $179 per CSR2 point, said Jim Knuth, senior vice president of Farm Credit Services of America.
CSR2 assesses the productivity potential of Iowa soils for row crop agriculture, especially corn.
Levels from the first half of this year show that willing buyers with sufficient working capital and cash on hand exist, Knuth said.
“The land market has been very stable, very resilient,” he noted. “Our most valuable assets continue to act in a predictable, stable manner. That’s good for Iowa and good for Iowa agriculture.”
Sustainable debt levels
So, is farmland now a good buy?
Well, there’s a saying that the best time to buy farmland is when it’s for sale. It boils down to your financial situation.
“Our most successful customers really keep a sharp eye on their debt levels,” Knuth said. “In production agriculture, high debt levels, high breakevens and high cost structures only work at the peak of [economic] cycles.”
For a farmland purchase, Knuth advises farmers to strive for a sustainable debt level that results in an annual land payment of about one-third of gross revenues. Also, consider that land payments will extend over several decades and myriad economic cycles.
“So, you have to estimate longer-term averages of revenue per acre,” Knuth said. “No one knows the exact number. It likely won’t be $7 [per bushel] corn. If you’re using a corn price between $4 [and] $5 per bushel, you are getting close.”
Don’t sweat Bill Gates or China
Farmland bought by tech gurus, pro athletes or foreign countries often create splashy headlines. But odds are these entities won’t be your competitors for farmland.
Instead, your competitors are your neighbors, as local farmers still fuel Iowa farmland markets.
“It’s trending even more in this direction,” Knuth said. “For years, the percentage of farmers who were buying ground hovered around 75%. 2024 was the first year it hit 80%, and during the first half of 2026, it was 86%.”
On the surface, this doesn’t make sense, given slumping commodity prices and spiraling input prices in recent years. A farmer’s land-buying motivation, though, differs from that of a non-farm investor, Knuth said.
“They don’t look at this as a short-term investment that has to clear some investment hurdle,” he said. “They think of it as making room for future generations in their family farm operations.”
Short-term cash rent factors
Conversely, cash rental agreements are short-term decisions driven by short-term economics.
“If commodity prices go up, a producer can afford to pay more for a year or two,” Knuth said.
However, the one-third of gross revenue rule of thumb also applies to cash rental payments. Each farmer will need to do the math that fits their own situation, Knuth added.
“The math differs for an [actual production history] of 200 bushels per acre versus an APH of 225 bushels per acre,” he said.
Another cash-rent option is a flex lease. This arrangement allows farmers to lock in a base rent while giving landowners the option to share in the upside of abundant yields or prices.
“While flex leases are still in the minority, they represent a fair balance between landowner and producer interests,” Knuth said.