Where We’re Going and Where We’ve Been: 2024 Farmland Reflections and 2025 Projections

When another year comes to a close, you might look forward to a rewind of the year, whether it’s music you had on repeat, milestones in the news, or time spent reading. Reflection is valuable, especially in revealing what is important to you and what your priorities are. At American Forest Management and AFM Ag Services, one of our priorities is ensuring that clients know their land managers and foresters are staying up to date on matters related to land management. As the chapter closes on 2024, we reflect on trends in farmland values and project trends in crop production in 2025.

In 2024, farmland showed stability in land values, mirroring trends from 2023. Although landowners and farmers are navigating a landscape of high input costs and relatively low commodity prices, the viability of farmland as an asset is still high. During the second quarter, farmers dealt with drought, flooding, and yet another drought in quarter three, which led to yield and lost revenue on the farm.  Even with this setback, Southeast farmland is not decreasing in value and has created stable farmland real estate prices. Interest rates have begun to stabilize, which supports consistent cash rent levels. For those interested in selling their farmland, a quick sale before year-end is a favorable option, given steady demand and limited inventory.

As we project into 2025, there are some continuing trends. While we may see increased costs or challenges in one area, cost decreases or benefits in another area help to establish stability and offset potential challenges. Let’s examine projections for commodity crop production, offsets to obstacles, and emerging hotspots.

Crop Production

·       As the most versatile crop in the Southeast, soybeans are a vital source of protein for livestock and a key ingredient in biodiesel. Soybean production is expected to grow due to expanded acreage, and precision agriculture ensures optimized growth conditions. An increased interest in plant-based foods also bolsters their position in the market.

·       Corn acreage is expected to see modest declines. Still, corn production is a staple in the Southeast, and its contributions to livestock feed, ethanol production, and food processing are crucial to food systems.

·       The Southeast dominates U.S. peanut production, with Georgia accounting for nearly half of the nation's output. Precision farming techniques, such as grid soil sampling and pest prediction models, allow peanut farmers to make data-driven decisions.

·       In states like Alabama and Georgia, cotton remains a top cash crop, as it is a major contributor to the textile industry and bio-based products. Cotton farming has been revolutionized with precision agriculture, as remote sensing technology provides farmers with invaluable information about crop health.

Offsets to Obstacles: As with any industry, obstacles may throw a wrench into the plans and require creative, critical thinking to address concerns. While labor shortages and input costs fluctuate, advancements in technology enhance efficiency, preventing dramatic changes in farm profitability and the marketplace.

Emerging Hotspots: In an effort to diversify income and revenue streams, landowners may be searching for multi-functional properties that allow for timber harvesting, agricultural activities, and more. Farms with proximity to urban areas are becoming increasingly popular for agritourism ventures, specifically with “pick-your-own” farm styles. Some post-pandemic trends continue today, as recreational land is still in steady demand. Lastly, undervalued rural areas, namely in Georgia and Alabama, are becoming more attractive as infrastructure and broadband internet access are improved.

These trends suggest a cautious but optimistic outlook for farmland owners and operators, with opportunities for those leveraging technological and sustainable practices to adapt to evolving conditions.