Indiana Land Values Could Fall Slightly in Late 2026
There is no land value crash, far from it, actually, but the author of a statewide survey of land values in Indiana would not be surprised if slight depreciation takes place in the final months of 2026.
Dr. Todd Kueth serves as the Schrader Endowed Chair in Farmland Economics at Purdue University; specializes in farm real estate, policy, and agricultural finance; consults at the Federal Reserve Bank of Chicago and Federal Reserve Bank of Kansas City, serves as Editor of the Agricultural Finance Review; and is Co-Editor of the Purdue Agricultural Economics Report (PAER).
Kueth cited two forces at play in Indiana in recent months in the latest Purdue Farmland Values and Cash Rent Survey.
What Outside Forces Are Holding Down Indiana Farmland Values?
"Many of the forces affecting farmland markets are putting downward pressure on values, including expectations for lower crop returns and higher interest rates," he stated in a news release about the Purdue Farmland Values and Cash Rent Survey results. "At the same time, limited land availability and other factors continue to provide support for farmland prices."
RELATED: This Indiana farm sold for nearly $19,000 with its proximity to a growing project driving up its value.
The survey detected land price movement that has taken place in other states. The highest quality farmland remains in demand and primarily continues to appreciate in value, while the lower quality farmland is experiencing the opposite.
Why Does the Highest Quality Indiana Farmland Continue to Rise?
Kueth's survey found that the average price of top quality farmland reached $14,909 per acre. That demonstrated a 0.6% yearly increase from June 2025.
However, average quality farmland fell 1.1% to $12,121 per acre over that period. Poor quality farmland dropped the most: 3.1% to $9,460 per acre.
After studying the results, Kueth concluded that the current economic land trends are similar to a decade ago.
"This pattern is similar to the 2014-2019 period, when farmland values stabilized following rapid growth," he wrote. "Overall, though, statewide farmland values remain well above historical averages, having increased considerably over the last ten years."
How Do Farmland Prices Compare to Cash Rents?
The Purdue University report also laid out several factors as it examined 66 years of Indiana farmland data.
Relationship between farmland prices and cash rents:
"...the current price-to-rent ratio is substantially higher than historical levels, suggesting that farmland prices may be high relative to the income generated by the land."
What is ahead for farmland prices:
"...periods of high price-to-rent ratios have historically been associated with lower subsequent returns to farmland investors."
Value of farmland:
"While factors such as relatively low land availability, the attractiveness of farmland as an investment and its role as an inflation hedge may continue to support values, lower net farm returns and higher interest rates could place additional pressure on prices in the years ahead."
RELATED: The value of Indiana's farmland, or any state's land for that matter, is more than just the price, Johnny Klemme believes. Klemme is co-owner of Geswein Farm & Land Realty in Lafayette, Indiana. He shared with American Farmland Owner why he thinks people hold different views of the value of farmland.
