When it comes to investing in farmland, affordability is often a key factor for many buyers. Across the United States, land prices vary significantly depending on location, soil quality, and local demand. Understanding which states offer the most affordable farmland can help prospective buyers make informed decisions and find opportunities to maximize their investment. This resource examines which states in the U.S. offer the most affordable farmland and delves into the reasons why investing in farmland is widely regarded as a smart financial move.
Which States Have the Most Affordable Farmland in the U.S.?
The states with the cheapest farmland in the U.S. are New Mexico, Wyoming, Nevada, Montana, and Colorado. These states have some of the lowest average prices per acre for farmland in the country!
1) New Mexico
The most affordable farmland in the U.S. can be found in New Mexico. According to the USDA National Agricultural Statistics Service (NASS), the average price for farmland in New Mexico is just $700 per acre. New Mexico stands out as a leader in pecan and chile production, earning a prominent place in the agricultural industry. The state’s farmlands are primarily dedicated to producing beef, milk, hay, corn, wheat, potatoes, and other staples. Additionally, New Mexico ranks among the top 10 states in the nation for both cheese and milk production, solidifying its reputation as a key contributor to U.S. agriculture.
2) Wyoming
Wyoming also offers very affordable farmland. According to NASS, the average price for farmland in Wyoming in 2024 was $975 per acre. The state categorizes agricultural land into three primary types: irrigated cropland, dry cropland, and rangeland. With abundant opportunities for farmers, the state’s most commonly grown grain crops include hay, wheat, oats, and barley. Given the low precipitation levels in the western region, a significant portion of the cropland relies on irrigation to thrive.
3) Nevada
Cheap farmland can also be found in Nevada. The average price for farmland in Nevada is $1,150 per acre. The state has a thriving agriculture sector, with its primary crops consisting of alfalfa, barley, oats, wheat, rye, and corn. Ranching is also a significant contributor to the state’s agricultural industry. Nevada ranks third in the nation for cattle herd sizes and fourth for sheep production.
4) Montana
Montana boasts some of the most affordable farmland in the United States, with an average cost of just $1,200 per acre. Much of this land is dedicated to grazing livestock, including cattle and sheep, while wheat serves as the state’s primary crop, covering over 6 million acres. Despite Montana's unpredictable weather occasionally disrupting growing seasons, agriculture remains the backbone of its economy. Livestock, including beef cattle, dairy products, hogs, and sheep, accounts for approximately 48% of the state’s annual agricultural output. Additionally, the majority of Montana’s 2 million irrigated acres are used to cultivate hay, further supporting its thriving agricultural industry.
5) Colorado
The average price per acre for farmland in Colorado is $2,200, making it an attractive option for those seeking affordable agricultural land. With its favorable climate and thriving agricultural and livestock industries, Colorado stands out as a prime location for farming and ranching. The state is renowned for its expansive livestock ranches, fertile orchards, and diverse crops, including corn, beans, sugar beets, and small grains. As a key player in the agricultural sector, Colorado offers excellent opportunities for farmers and investors alike.
What Affects the Price of Farmland?
Although the states mentioned above have the cheapest farmland in the country, it's important to remember that the specific prices per acre are dependent on many factors. One of the most significant factors that affected the value of agricultural land is the demand for the land. Areas with a high demand for farmland, such as those close to major cities or with ideal climates and soil conditions, often have higher prices per acre.
Another important factor is the type of land. For example, irrigated cropland will generally have a higher price per acre compared to dry cropland due to the added cost and maintenance required for irrigation systems. Similarly, the type and quality of the soil types on a specific property affects its value. Land with fertile soil and a history of successful crop production will often have a higher price per acre.
Other factors that can influence farmland prices include government subsidies, which can provide financial support to farmers and affect the overall value of agricultural land, as well as commodity prices, which fluctuate based on market demand and can directly impact the profitability of farming. Additionally, land productivity plays a crucial role, as fertile, high-yield farmland is typically valued higher than less productive land. It's essential for potential buyers to consider all these variables, along with local market conditions and long-term economic trends, before making an investment in farmland.
Is it Worth Buying Agricultural Land in the U.S.?
There are many benefits of investing in agricultural land, so many consider buying agricultural land in the U.S. worth it. Farmland is a scarce commodity that steadily increases in value over time. As a finite resource, the availability of arable land cannot meet the long-term growth in global demand for food, fueling its appreciation in value. Additionally, urbanization and land development further reduce the amount of land available for farming, making existing farmland even more desirable. This limited supply, coupled with rising demand for agricultural products, creates a strong foundation for steady increases in farmland prices. For investors, this characteristic makes farmland a relatively stable and lucrative long-term asset.
In terms of profitability, agricultural land in the U.S. has consistently shown strong returns on investment. According to data from Farmland Investor Center, U.S. farmland has yielded an average annual return of 11% over the past 20 years. This rate surpasses other traditional investments such as stocks and bonds, highlighting the potential for significant returns on farmland investments.
Farmland can be a great source of passive income. In the United States, there are approximately 911 million acres of farmland, with over half of the cropland rented out. Landowners can generate income in several ways. They can lease their agricultural land to farmers who want to grow crops or raise animals, lease it to renewable energy companies for wind turbines or solar panels, or allow hunters and off-road enthusiasts to use the property for recreational purposes.
How to Find Affordable Farmland for Sale
LandGate's marketplace is an excellent resource for finding affordable farmland for sale. The platform offers a user-friendly interface that allows potential buyers to search for land based on location, size, price, and more. By providing detailed data on property listings, such as soil quality, water access, and lease opportunities, LandGate equips buyers with the necessary information to make informed decisions. Additionally, the platform features tools for comparing properties and estimating the potential income from farming, renewable energy leases, or recreational use. With its comprehensive database and transparent approach, LandGate simplifies the process of identifying and purchasing farmland that aligns with your budget and investment goals.
How to Research Farmland for Due Diligence
Purchasing farmland is a significant investment, and conducting thorough due diligence is essential to ensure a successful transaction. Understanding key factors such as soil quality, water availability, land use restrictions, and zoning regulations can significantly impact the profitability and long-term value of the land. Additionally, examining historical land use and environmental considerations, such as flood zones or contamination risks, helps buyers avoid unforeseen challenges.
LandGate's LandApp is an invaluable tool to support due diligence efforts. This innovative application provides users with comprehensive and accurate data on potential farmland acquisitions. From analyzing soil productivity and water resources to identifying renewable energy potential and current leases, LandApp offers insights that are critical for making well-informed decisions for just $10 monthly. The app also streamlines the process by aggregating all necessary information in one place, saving buyers time and reducing the risk of oversights. By leveraging LandApp, buyers gain the confidence to invest in farmland that meets their economic and operational goals.
