After the tariff announcements, many experts anticipate a potential decline in ag land prices due to the impact of tariffs on commodity prices and farm income. However, the low supply of land for sale may continue to support land prices, particularly for quality land.

Here are some positives in the marketplace to keep in mind:

We currently have low available inventory to meet the high demand for land across the US. This helps keep prices stable. We may see more shifts in land values if there were more properties currently listed on the market, but with our current inventory, demand should maintain those prices around their current levels.

Uncertainty in the stock market is causing some investors to invest in land vs. stocks or other investments. Ag land often outperforms other types of investments for several reasons. Ag land investments can offer returns through both land appreciation and rental income, with historical average annual returns ranging from 8% to 12%. Farmland values also tend to increase over time, providing capital gains for investors. Finally, leasing land to farmers for cultivation generates a steady income stream.

Kids coming back to the farm creates the need for expansion. As this next generation of farmers gets older, they’ll need to purchase additional land to support their ag operations. Likewise, the current generation of farmers is aging, and many may elect to sell their land if there are no heirs to continue the operation. We are in a demographic shift at this point in time, which is going to continue for at least the next decade. 

Continued permission to utilize E15 during the 2025 driving season could provide relief at the gas pump, as well as continue to keep the market open for America’s farmers and ethanol producers – i.e., support the rural economy. E15 has saved consumers 10-30 cents per gallon over the past three years, making it an attractive option for many in an economic environment where every penny counts.

There is also the potential for emergency aid to farmers, as seen in the 2018 trade war with China. While we shouldn’t count on this kind of government intervention, the precedent set in 2018 should hopefully provide some peace of mind.

On the other side of the coin:

• Interest rates are higher than 1-2 years ago, and the Fed continues to show concern that inflation may rise.
• Uncertainties in trade/tariffs with export partners looking to potentially trade with other countries, such as Brazil, for corn/soybeans. We’ll have to wait and see if the US will be able to win back those markets.
• Tight operating capital for some farmers
• Uncertainties in how immigration policies/reform may impact the ag labor market

These uncertainties impact not only individual farmers but the economy as a whole. For example, since I am in MN, our largest trading partners are Mexico and Canada, together with China, Japan, and South Korea. MN’s ag industries contribute over 15% of MN’s total economic activities and support 10% of all jobs. 

Total output impact: $106 billion. 

Total employment: 388,134 jobs.

What isn’t often considered are the industry sectors impacted by ag: agriculture, agribusiness, manufacturing, wholesale/retail trade, transportation, construction, utilities, finance, real estate, and other supply/services.

While these tariffs will likely have an impact on all of the industries listed above, it’s important to try and stay positive while we look for these uncertainties to be resolved.

If you’ve got questions about tariffs and what they may mean for land values, get in touch with me at Tjensen@NationalLand.com or reach out to your local Land professional!