AgAmerica’s Curt Covington: Why Farmland Values May Drop
- Dave Price
- Apr 10
- 5 min read
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The years-long increase in farmland values may finally fall victim to financial pressure’s gravity after previously showing remarkable resilience despite inflation, supply chain strains, input cost increases, and declining farmer incomes. That is the feeling from Curt Covington, Senior Director of Institution Credit at AgAmerica Lending.
Stress has been building on farming operations, Covington noted, but it impacts different people in different ways.
“There are good operators and bad operators,” Covington told American Farmland Owner from his office in Lakeland, Florida. “But the majority of them are average to below average operators in a lot of these industries, and it is a regional situation. It’s both commodity and geographic.”
That reality is playing out most dramatically on the West Coast.
“Probably for the first time in two or three decades, I haven’t seen this much stress out on the West Coast in a long, long time,” he said. “And I’ve been doing this almost 47 years.”
Curt Covington bio:
AgAmerica Lending-- Senior Director of Institution Credit
Farmer Mac – Former Executive Vice President
Bank of the West – Former Senior Vice President
Raised on family farm – Near Fresno, California (almonds, grapes, walnuts, and cotton)
Many West Coast farmers struggle
California agriculture—long a powerhouse of specialty crops—is facing a convergence of challenges: high costs, water constraints, shifting consumer demand, and global competition. The result is a landscape where only a handful of commodities are holding their own.
“The West specialty crops are pretty much in very difficult shape,” Covington said. “You could count on one hand the commodities that are doing decently. Citrus is, for the most part, doing okay. But when you get to all the other commodities… it’s a bit of a struggle, including the dairy industry at this point.”
That struggle is more than just cyclical. It’s financial. And in many cases, it is existential.
“A lot of issues with these farmers is that they’ve simply run out of cash,” he said. “They literally have run out of cash, and no lender’s going to lend you money if you’re not going to share the risk from a liquidity standpoint.”
RELATED: This is what Curt Covington told American Farmland Owner about what he was seeing in late 2024 that became bigger obstacles in the next two years.
The implications ripple far beyond the farm gate. Land values in parts of the West have already begun to fall—down 10% to 20% in some areas—eroding equity and making refinancing nearly impossible.
“When that happens, all of your lendable equity is gone,” Covington explained. “Your ability to refinance is gone. Your ability to recapitalize your lost working capital from farm losses? Gone.”
RELATED: AgAmerica’s 2026 Ag Economy Report showed how much the industry depended on federal taxpayer assistance, how credit has been tightening, and the extra challenges that the environment brings for new farmers.
Within California, performance varies widely by commodity. Tree fruit—peaches, plums, and nectarines—has stabilized after years of consolidation.
“There has been a lot of cleansing in that market,” Covington said. “The really good operators are pretty much the ones that remain.”
But other sectors tell a different story. Wine grapes, particularly along the Central Coast and Central Valley, have been hit hard.
“…it’s been a bloodbath,” he said.
The almond industry continues to struggle, while pistachios are holding steady—for now.
“The pistachio industry is fine,” Covington said, before adding a note of caution. “But it’s going to start suffering from oversupply if they don’t start finding ways to market that crop.”
Even traditionally resilient sectors like dairy are under pressure, though California producers continue to adapt.
“These dairy farmers continue to thrive, despite all the problems that they have,” he said. “Most of them run it like a manufacturing plant… they’re excellent at controlling their costs.”
Falling commodity prices in the Midwest
While the West grapples with structural challenges, the Midwest is facing a more familiar—but no less serious—problem: falling commodity prices.
“You go to the Midwest, you’re starting to see the implications of lower commodity prices,” Covington said. “Your average corn and bean farmer… is going to be posting some pretty significant losses.”
For many producers, those losses are compounding after several years of tighter margins. The cushion that once existed—strong balance sheets and relatively low leverage—is disappearing.
“Back then, we still had enough producers that were not as leveraged, so there was a little cushion,” Covington said. “We’ve reached a point now where more of them have just lost that cushion.”
The consequences are showing up in lending decisions. Farmers who once had ready access to capital are finding doors closing.
“You’ve got conservative lenders that are going to look at this and say, ‘I’m just not willing to take a chance on this borrower,’” he said.
At the same time, interest rates remain stubbornly high, increasing the cost of refinancing for those who still have the option.
“To refinance will take them to higher interest rates. They’re in a depleted liquidity position. Their working capital is pretty much gone,” Covington said.
Prosperous industries in agriculture
Despite the challenges, not all agriculture is struggling. Covington points to a few key bright spots—most notably high-quality farmland and the cattle sector.
“Good quality farm ground, some areas of the U.S., good quality water are still in demand and are probably going at a premium,” he said.
And while many crop producers are under pressure, livestock has provided a counterbalance.
“Short of government payment programs… and probably short of the cattle sector, most farmers are in a position where they are struggling,” Covington said.
Even within struggling regions, top-tier operators continue to outperform.
“I’m not saying that’s true for all farmers,” he noted. “You’ve got the top-tier farmers that have done things right.”
That growing gap—between strong and weak operators, between resilient commodities and oversupplied ones, between regions with water and those without—is shaping the future of agriculture.
Covington thinks that institutional investors are more interested in agriculture.
“They’re starting to come back into the market,” Covington said, “because they think… this may be the trough.”
Farmland values across the country
If there’s a common thread in Covington’s outlook, it’s that agriculture is at an inflection point.
Land values, which have surged for years, appear to have peaked in many areas.
“The majority of these properties have reached the pinnacle of their land values,” he said.
From here, the path forward will likely depend on a combination of factors: interest rates, global demand, government policy, and perhaps most importantly, how individual operators adapt.
As Covington put it, “It is a regional situation. It’s both commodity and geographic.”
