Farmers Are Losing Money, But Investors Are Flocking To Farmland

Farmers are starting to buckle under the weight of low commodity costs, high input prices and roller-coaster tariff policies, opening a path for consolidation in the sector.

Chapter 12 bankruptcy filings, the portion of tax code specifically for farmers, rose 45% annually to a three-year high in 2025. The uptick in distress comes as rapid appreciation of farmland tapers off, giving well-capitalized investors looking for relative stability and an inflation hedge a path to push deeper into the sector. 

“Farmers are not doing great. The farm economy is not doing great, but farmland values are still very stable,” said Luca Fabbri, CEO of REIT Farmland Partners. “If farm values go down 5%, that would be a tragic year in the history books of farmland, and that's very different from other real estate asset classes.”

Farmland prices rose 4.7% nationally in 2025 to $4,350 per acre, according to the 2025 Land Values Summary recently released by the U.S. Department of Agriculture. Prices have steadily appreciated since 2011, but growth accelerated around 2020 when crop prices jumped at the same time that farmers had bumper crop yields.

A modest market correction is taking hold as the sector catches up with its own pandemic-era price growth, but, rather than pull back, investors and well-capitalized operators are doubling down. 

“A lot of the tenants that we work with — who are majority privately owned family businesses — they actually see the current market as an opportunity,” said Martin Davies, head of Nuveen Natural Capital, one of the country’s largest investors in farmland. 

Capital has flowed into the sector in recent years, but farmers and farm operators still own 91% of the farm acreage in the country. Small family farms work 40% of the country’s farmland, and just 3.1% of farms are not family-operated, according to the Department of Agriculture.

Farmers typically carry less debt than traditional commercial real estate assets, but shrinking income is leading to rising leverage in the sector. Those debt service and lease expenses are often what pushes a farm into distress. 

“Bankruptcies go up higher and higher as they rent more of their land than the percentage that they own outright,” said Rebecca Leis, a policy analyst for the Midwest branch of the nonprofit Council of State Governments. “If you own land without mortgages, you're doing pretty decently despite the hiccups.”

Chapter 12 bankruptcies have more than doubled from a decade low of 139 in 2023 to 315 last year, according to the Farm Bureau. While still relatively low, and below the decade average of 373 bankruptcies per year, the rising trend line suggests that conditions for crop producers are not improving. 

'Tough Times in Rural America'

Farmers lose more than $100 per acre growing corn and soybeans, before accounting for subsidies, according to the American Farm Bureau Federation, the farm industry’s lobbying group. Pricing for those commodities, along with wheat, are down more than 50% from recent highs.

Federal aid can bridge the gap for some operators — the White House rolled out a $12B aid package to help the country’s food producers adjust to new protectionist trade policies — but it’s not enough for some leveraged owners with debt service costs that are facing an uncertain policy landscape driven by President Donald Trump’s tariff policy.

The topline bankruptcy figure disguises wide regional variance. Bankruptcy rates jumped by 69% or more in the Midwest, Southeast and Southwest, while they declined in the Northeast and Northwest. 

“It's something that farmers and ranchers, if you've been talking to them, have been telling you for three or four years, and now the data is finally catching up with them,” Farm Bureau economist Faith Parum said. “It is a pretty good warning sign that we are seeing tough times in rural America.”

The sinking commodity prices and tight margins for farm operators are likely to drag down land values in 2026, followed by two years of flat growth, before a recovery takes hold, analysts at MetLife Investment Management wrote in November.

Land in Louisiana, Mississippi and Arkansas is forecast to appreciate by more than 10% cumulatively by 2030. But the gains are expected to be more modest across six U.S. regions, while values are slated to slip anywhere from 3% to 10% in the Great Plains, Southwest and Mountain West.

Tenant renewals were flat this year for leases that came up on the 71,000 acres owned by Farmland Partners after several years of double-digit rent growth, Fabbri said. 

But demand remains high, and farmers who can leverage scale to cut costs continue to look to expand operations. A new tenant recently pounced when a rare parcel in Farmland Partners’ portfolio became available.

“We had one tenant who is retiring, and, within less than 24 hours, we had a replacement tenant willing to pick up the lease at exactly the same terms,” Fabbri said.

'The One Chance In Their Lifetime'

For the investment class, farmland looks a lot like core commercial real estate assets until term length is considered. Unlike office towers and apartment developments that trade relatively frequently, family farms are generational assets that have usually been owned by the same family for decades.

The value of a parcel can be as much a product of how much the neighboring farm wants to own it as its overall yield, said Drew Lipke, the managing director at fractional ownership platform AcreTrader. 

There’s efficiency in scale, and well-capitalized farmers are likely to seize on opportunities to pick up contiguous land, which can create bidding wars for some parcels.

“When a farm comes up for sale, many people view it as the one chance in their lifetime they're going to get to buy that property, and so they're going to be highly motivated,” Lipke said. 

Transaction volumes peaked in late 2023 and early 2024, and there’s been minimal drawdown since then, he said. 

AcreTrader, which purchases properties and parks them inside a separate entity that investors can purchase shares in, has grown to thousands of users with, on average, roughly $100K invested on the platform.

After building its platform on institutional investment, Nuveen is also becoming more focused on individuals, and Nuveen Natural Capital designed some of its recent strategies to attract the wealth channel, Davies said. 

Farmland is looking more attractive to high net worth individuals and family offices. Buyers in the space are frequently looking for an inflation hedge and a safer bet to pair with more volatile investments in alternative assets like data centers, where talk of a bubble has surfaced. 

“I can tell you one thing for certain: In 10 or 15 years, we are all still going to be eating, so we're going to need farmland. But I don't necessarily know that anybody can give you a solid prediction on whether hyperscale data centers are going to be relevant or not,” Davies said. 

Investors are also expecting the next several years to be a rare buying opportunity as the baby boomer generation retires. The average farmer was 58 years old in 2022, and their children have frequently moved out of the area or are otherwise uninterested in taking over the family business. Investors are poised to fill that gap. 

Those upcoming listings will offer private equity and other capital sources a wider opening than usual to push into the space, and the sector is uniquely positioned for consolidation, said Tom Sullivan, managing director at Farmland LP, a private firm focused on value-add opportunities with more than 19,000 acres in the Pacific Northwest.

“You're talking about a $4T market, so as that begins to turn over, there's going to be opportunities to get to scale very quickly,” Sullivan said. 

Proterra Investment Partners, an alternative asset manager that spun off from a division of Cargill, acquired AcreTrader in August. The firm already had a global land presence, but the AcreTrader deal unlocked scale in the North American market. 

The firm already manages capital for institutional investors including pensions and endowments but is focused in the near term on increasing AcreTrader’s reach among individual investors, Proterra co-founder Rich Gammill said. 

Sullivan, whose firm is focused on organic and regenerative farming, said he’s had some major capital players poking around his business. 

“We have received those calls from large asset managers exploring the sector already,” he said.