Halderman update: Ag real estate market shows signs of softening

WABASH, Ind. — The ag real estate market is showing signs of softening in 2026, said Howard Halderman, president and CEO of Halderman Farm Management and Real Estate Services, during a recent webinar.

Halderman noted that the outbreak of the Iran war earlier in 2026 and the subsequent closure of the Strait of Hormuz acted as a bearish catalyst. The conflict triggered sudden spikes in diesel, gasoline and fertilizer costs, compressing farmer margins.

“If you’re a farmer and you didn’t have those things already prepaid, you were looking at substantially higher prices,” Halderman said. “As a result, that is acting I think a little bit of a bearish factor in the farm real estate market.”

The Federal Reserve Bank of Chicago reported its district remaining up about 3% year over year, but the first quarter of 2026 revealed a slight downward turn, with Indiana down 2% and Illinois down 1%.

Recent Halderman cropland auctions averaged around $91.25 per Weighted Productivity Index point — a measure that compares farmland values based on soil productivity — while several recent sales have been closer to the $80 mark.

Halderman said farmland values may be down around 10% on average, although it varies by region.

He also addressed social media claims about foreign investors. He clarified that the majority of farmland buyers remain domestic farmer operators.

“Our data shows that farmers bought farms 60% of the time at Halderman sales,” he said. “The overall marketplace is closer to 70%. The majority of the buyers remain farmers.

“That’s who’s always going to be the majority buyer. They’re willing to buy that piece next to them and take a little bit lower rate of return on investment than the investor will.”

The investors remain in the market, but they are a foundational floor in the market, Halderman said.

“Most, if not all, of our transactions the last year or two have been to domestic U.S. investors,” he said.