LUBBOCK, TEXAS (RFD NEWS) — Farmland values held mostly steady or edged higher nationwide in 2025, underscoring how closely land markets remain tied to farm finances and lending stability. A new report to the Farm Credit Administration (PDF Version) board highlights land as a key driver of borrower balance sheets and credit risk.
Real estate loans account for more than 40 percent of the Farm Credit System portfolio, meaning shifts in land values directly affect lenders and producers. Regulators also approved a proposed rule that updates how administrative assessments are divided among System institutions, without changing the overall amount.
Operationally, limited land supply, government support, and strong livestock margins supported values, while higher interest rates and weak commodity prices put pressure on some areas.
Regionally, the Midwest posted modest gains late in 2025, led by Iowa, while the Delta remained stable, with potential downside if stressed producers sell land. Texas values rose on strong demand, and Western markets showed mixed trends tied to water constraints and crop profitability. Northeast and Southeast values also increased amid tight supply.
Looking ahead, regulators say higher borrowing costs and weaker commodity returns could soften land markets in parts of the country during 2026.
Even as ag land values continue to rise and demand for data center expansion is higher than ever, farm groups are weighing land sales against long-term stability. Darin Von Ruden, president of the Wisconsin Farmers Union, says it remains unclear what the full impact could be for farm country.
“We spent a lot of time on AI tech centers and really trying to figure out some language; number one, because of how fast they’re coming on board, and looking at what’s going on, a couple of states wanted to see that they needed to provide their own power,” Von Ruden explains. “And after quite a bit of discussion, you know, looking at how that could impact other states. The thought was that they would make every consumer’s electric bill go up. But in reality, if they have their own system and get off the grid, that could actually cause more price spikes for the average consumer, because the electric and utility companies really want to see that power going through their lines, and all of a sudden, it isn’t. Water is a big issue for AI tech centers, too.”
While data centers may not use as much water as in the past, this is a growing, legitimate concern for rural America, and advocates say it is important to keep the conversation in the headlines and before lawmakers.
“The last issue on data centers is for public officials to not sign non-disclosure agreements, or NDAs, as they’re called, a lot, and if it’s in the public’s interest, either good or bad, the public should know about it,” Von Ruden continued. “For instance, in Duluth, Minnesota, last year, there was an NDA signed between the city council there and the builder of an AI tech center, and it really left the general public out in the middle of nowhere, because they couldn’t get information out of their elected officials. And if you’re elected by the general public, you should be responsible to them.”
Von Ruden says the Midwest, in particular, is attracting interest for data centers. A recent farmdoc report states that farmers are increasingly turning down bids for their land.
