Investment Funds are Plowing into Farmland

Investment Funds are Plowing into Farmland  – Here’s Why

Investment funds are buying vast acres of crop and pasture land as they project land values will continue to grow exponentially. What does that mean for independent producers and why is this happening now?

Reuters recently reported that between 2008 and Q2 of 2023, the amount of farmland and agricultural real estate owned by investment funds increased by 231%. The number of acres owned by foreign entities increased 64% to about 40.8 million acres between 2010 and 2021, with the value doubling to about $72.5 billion, according to the most recent USDA data available.

Eric Johnson, co-founder of CJ Real Estate, a land auction company, said that when investors enter the land market it drives up the price per acre establishing a new cost baseline for everyone.

The average age of farmers and ranchers has been rising for years. “Land costs are a substantial barrier for young producers,” said Troy Shelby, President of the Oklahoma Cattlemen’s Association. It’s a significant challenge for family-owned operations. If the next generation doesn’t want to continue the operation, someone is going to buy that land.

Land Values are Growing

Strong demand has been driven by high commodity prices as well as institutional foreign and domestic investment. According to USDA 2023 reports:

  • For U.S. pastureland, the average value in 2023 was $1,760 per acre, a $110 increase over 2022 and a 66% increase since 2009.
  • The average value of U.S. cropland (irrigated and non-irrigated) was $5,460 per acre in 2023, increasing 8.1% from 2022. From 2009 to 2023, cropland value increased 107%.
  • For pasture, the average value at the state level ranged from $490 per acre in New Mexico to $16,600 in New Jersey. The change in value ranged from a 1.5% increase in Wyoming to a 16.2% increase in Kansas. The Northern Plains region (Kansas, Nebraska, North Dakota, and South Dakota) had the highest increase in pasture value per acre at 13.5%.
  • At $155 per acre, the average rate to rent cropland in the United States in 2023 was $7 higher than in 2022. The average rate per acre for irrigated cropland was $237 (up from $227 in 2022) and non-irrigated cropland was $142 (up from $135 in 2022). For pastureland, the average rental per acre at $15 is up $1 from 2022. Among states, the rental cost per acre in 2023 ranged from $34.50 in Oklahoma to $347 in Arizona for all cropland.

Doing More with Less

Some producers say the best way to farm and ranch is the way it’s always been done, doubling down on techniques and values that have served them for years. Savvy farmers and ranchers understand that sustainability is key to improving production efficiency so that they can maintain profitability and meet growing food demand.

Farmers and ranchers today are doing more with less thanks to innovation and technology. In fact, U.S. agriculture would have needed nearly 100 million more acres 30 years ago to match today’s production levels. Smarter equipment, precision tools and biotechnology are helping agribusiness produce more, while using less water, fertilizer and pesticides.

From climate-smart farming practices to voluntary management of forests, grasslands, wetlands and croplands, farmers and cattlemen are not only reducing their footprint, but also are actively absorbing carbon from the atmosphere.

According to the EPA, land management practices alone removed 764 million metric tons of CO2 from the atmosphere in 2018. That is equal to taking 165 million vehicles off the road for a year. And, U.S. livestock emissions are declining thanks to improvements in feed and production and currently make up less than 4% of overall emissions.

Demand for carbon offsets from agriculture has grown significantly in recent years. But the current process is cumbersome, confusing and offers limited return on investment with high transaction costs which limits farmers’, ranchers’ and foresters’ participation. According to a recent U.S. Agriculture Department study, only 3 percent of farmers, ranchers and landowners are using available carbon credit programs that pay them to remove carbon dioxide from the air and sequester it in the soil. Producers who want to participate must hire private parties to help them adopt the right conservation practices and verify that certain processes and protocols were followed in implementing those practices. And accreditation of these private carbon credit management companies is murky at best adding more doubt to an already murky process.

Sustainability Incentives and Assistance

There are a variety of programs designed to help farmers and ranchers incorporate more sustainable practices into their operations. Here are a few of the most active and interesting:

  • Through the Rural and Agricultural Income & Savings from Renewable Energy (RAISE) initiative, the USDA aims to help individual farmers deploy smaller-scale wind projects using USDA’s Rural Energy for America Program (REAP) which provides $144 million in grant funding for underutilized technologies.
  • The DOE is providing $4 million in funding related to REAP, including $2.5 million to support the testing, certification and commercialization of the latest distributed wind technologies including for the agricultural sector, and $1.5 million to support outreach and the identification and development of new business models for farmers to save money and earn income deploying these technologies.
  • The Environmental Quality Incentives Program (EQIP) is a voluntary conservation program that offers farmers and ranchers financial cost-share and technical assistance to implement conservation practices on working agricultural land.
  • AFRI Sustainable Agricultural Systems (SAS) promotes the sustainable supply of abundant, affordable, safe, nutritious, and accessible food and other agricultural products, while enhancing economic opportunities.
  • Equipment Grants Program (EGP) serves to increase access to shared-use special purpose equipment/instruments for fundamental and applied research for use in the food and agricultural sciences programs.

A More Productive Future

Farm and ranch sustainability practices play a crucial role in maintaining the long-term health and productivity of agricultural lands. By implementing conservation measures, landowners can reap several benefits:

  • Improved Profitability: Sustainable practices enhance production efficiency, reduce input costs, and optimize resource utilization. This translates to better financial returns for landowners.
  • Environmental Stewardship: Conservation efforts contribute to soil health, water quality, and biodiversity. By safeguarding natural resources, landowners ensure the resilience of their operations and protect the environment for future generations.
  • Carbon Sequestration: Practices like cover cropping, rotational grazing, and reforestation sequester carbon, mitigating climate change. Agricultural lands can serve as valuable carbon sinks, benefiting both the planet and landowners.
  • Collaboration and Support: Landowners can collaborate with agencies like the USDA’s Natural Resources Conservation Service (NRCS) to access technical assistance, financial resources, and personalized advice. These partnerships foster sustainable practices and address specific conservation goals.

The Long-Term Impact on Land Values

The growing demand for food, renewable energy, and sustainable practices, coupled with limited supply should drive positive tailwinds for agricultural land values over the long term.

Institutional investors know that constants such as global population increase, proportional food demand and urbanization make land investment a stable and profitable investment.

The factors that forge land value are evolving. Independent landowners, farmers and ranchers can make the most of this by diversifying income streams by producing renewable energy, embracing carbon credits, leasing to recreational interests, and incorporating sustainability.

Maximize Your Lands Value

Managing your ranch land well now will pay big dividends when the time comes to sell. Well managed ranch land attracts a larger pool of buyers, increasing competition for your land which leads to higher sale prices.

Auctioneer Sonny Booth advised, “High sales prices don’t happen by accident. I’d like to take all the credit for high sale prices but the truth is that ranchers with a reputation for quality land management are an auctioneers best friend when it comes to getting top-dollar on sale day.”

As a rancher, you already know the importance of proper land management in ensuring the well-being of your livestock. Have you truly considered how good ranch land management can also impact the bottom line when it comes time to sell your property? Check out these tips for maximizing your re-sale value through effective ranch land management.

Regularly Check and Maintain Fences

One of the most important aspects of ranch land management is keeping your fences in good condition. This not only keeps your livestock safe but also prevents them from wandering off into neighboring properties. Regularly check your fences and make any necessary repairs. A well-maintained fence can also make your property look more visually appealing to potential buyers.

Implement Sustainable Grazing Management Practices

Many ranchers are shocked to learn that nearly 70% of available grazing land in the United States is degraded in some form as discussed in this recent article published in the Angus Journal.   Overgrazing can have a negative impact on your pasture’s health and, in turn, decrease your property’s sales value. Consider implementing sustainable grazing management practices that allow for adequate rest periods between grazing cycles. This will help maintain the health and productivity of your pasture while also ensuring the long-term profitability of your ranch.

Properly Manage Water Resources

Water is a fundamental resource for both your livestock and your land. Properly managing water resources can prevent soil erosion and maintain pasture productivity. Regularly cleaning out and maintaining ponds and waterways can not only make your property look better but also make it more appealing to potential buyers.

Remove Unwanted Vegetation

Weeds and invasive plant species can significantly reduce the productivity of your pastureland. Consider implementing a regular weed control program to keep unwanted vegetation under control. Not only will this help maintain the productivity of your land, but it will also make your property look more visually appealing.

Maintain Buildings and Infrastructure

Maintaining your ranch’s buildings and infrastructure doesn’t just make your property look better, it also increases resale value. Regularly inspect and maintain your ranch’s buildings, corrals, and other infrastructure to ensure they’re up to code, fully functioning and eye-appealing. This makes your property more attractive to prospective buyers and increases the sale price.


Proper ranch land management is critical to maintaining both the short-term productivity and long-term profitability of your ranch. Investing in regular maintenance and improvements to your property can make it more visually appealing to potential buyers, increase its sales value, and ensure the continued success of your operation. By implementing the above tips for effective ranch land management, you can maximize your sale profitability and set your ranch up for long-term success.


ABOUT CJ REAL ESTATE:  CJ Real Estate sells ranch and residential real estate across Oklahoma, Texas, Arkansas, Missouri, Kansas and Colorado. Led by Eric Johnson and Ronn Cunningham, the CJ Real Estate team specializes in complex acreage sales typically dispersing assets in 45 days while outperforming market conditions. What makes CJ Real Estate different is that they give sellers more control through unbiased advice and the opportunity to choose the real estate sale method that’s best for them: auction or listing.



Eric Johnson



SOURCE: Cunningham-Johnson Real Estate