Purdue Agricultural Economics Report

The Purdue Agricultural Economics Report (PAER) exists to serve and further the core mission of the department to engage with real world problems that are of value to stakeholders. The scholarship communicated in this publication will represent the department’s excellence in creative endeavor for new knowledge and its dissemination in the economics of agriculture and natural resources.

Recent Publication:

2025-08 PAER: Purdue Farmland Values and Cash Rents Survey Results

August 19, 2025

Indiana farmland prices have continued the trend of record highs in 2025, according to the latest Purdue Farmland Value and Cash Rents Survey results. The survey is conducted out of the Purdue University Department of Agricultural Economics and produced through the cooperation of numerous professionals knowledgeable about Indiana’s farmland market. These professionals provide an estimate of the market value for bare poor-, average- and top-quality farmland in December 2024, June 2025 and a forecast for December 2025. The average price of top-quality farmland reached $14,826 per acre (a 3.0% increase). Average- (a 5.4% increase) and poor- (a 7.6% increase) quality farmland also saw gains.

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Articles:

Farmland Prices Increase Despite Downward Pressure
Publication Date: August 2025
Article ID: PAER-2025-11

Author: Todd Kuethe, Professor & Schrader Chair of Farmland Economics

Summary: Indiana farmland values hit new record highs in 2025 despite regional declines, with development demand and recreational land gains offsetting downward pressure from lower farm incomes, weaker crop prices, and interest rates.
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Are farmland price expectations “wrong”? It depends how you ask.
Publication Date: August 2025
Article ID: PAER-2025-12

Author: Dewey J. Robertson, MS Agricultural Economics Student

Summary: Analysis of the Purdue Farmland Values and Cash Rents Survey shows price expectations often seem inaccurate because they’re assumed to be averages—when many respondents report the most likely price. Viewed this way, expectations are rational in most cases, making them more useful for producers and investors.
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Is farmland a good investment? Comparing risk and returns to other asset classes
Publication Date: August 2025
Article ID: PAER-2025-13

Author: Dewey J. Robertson, MS Agricultural Economics Student & Todd Kuethe, Professor of Agricultural Economics

Summary: Indiana farmland offers returns above bonds but below equities, with less volatility than stocks. Adding cash rents boosts returns, and its low correlation with equities and inverse correlation with bonds make it a strong portfolio diversifier.
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Trends in Farmland Price to Rent Ratios in Indiana
Publication Date: August 2025
Article ID: PAER-2025-14

Author: Michael Langemeier, Professor of Agricultural Economic

Summary: The P/rent ratio (farmland price per acre divided by cash rent per acre) is substantially higher than historical values. The P/rent10 ratio is computed by dividing farmland price per acre by the ten-year moving average cash rent. A negative relationship was found between the P/rent10 ratio at the time of purchase, and the 10-year and 20-year rates of return.
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The Outlook for the U.S. Economy in 2025
Publication Date: January 2025
Article ID: PAER-2025-01

Author: Larry DeBoer, Extension Specialist and Professor Emeritus

Summary: Amid much policy uncertainty, output will likely grow about 2.2% in 2025, a bit slower than in 2024. Inflation should fall gradually to 2.4%, the unemployment rate should remain unchanged, and the Fed will cut interest rates more slowly than previously expected.
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Interesting Times for U.S. Trade Policy
Publication Date: January 2025
Article ID: PAER-2025-02

Author: Russell Hillberry, Professor of Agricultural Economics

Summary: The President-elect’s trade policy is likely to be at least as harmful in his second term in office as it was in his first term. Export-oriented agriculture will bear a disproportionate share of the costs from another trade war.
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Farm Policy Outlook
Publication Date: January 2025
Article ID: PAER-2025-03

Authors: Dewey J. Robertson, Graduate Research Assistant; Roman Keeney, Associate Professor of Agricultural Economics

Summary: In this outlook we examine the agricultural policy implications of a new Trump administration, focusing on the potential passing of a 2025 farm bill and its impact on the sector. We consider how the farm safety net will address new policy agendas such as federal budget priorities and broader economic issues such as trade, immigration, and energy.
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Food Prices
Publication Date: January 2025
Article ID: PAER-2025-04

Authors: Caitlinn Hubbell, Market Research Analyst; Joe Balagtas, Professor of Agricultural Economics

Summary: Hubbell and Balagtas take a look back at the big food price stories over the past year. They also look ahead at what’s in store for 2025, and discuss how food prices may be affected by policy changes and weather events in the year to come.
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Health Outcomes: How does Indiana compare to the rest of the country?
Publication Date: January 2025
Article ID: PAER-2025-05

Author: Laura Montenovo, Assistant Professor of Agricultural Economics

Summary: Indiana's health outcomes largely align with U.S. averages, but notable differences exist, including a lower life expectancy by nearly two years and a lower uninsured rate. Unlike national trends, Indiana counties do not show a strong inverse relationship between uninsurance rates and life expectancy.
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2025 Agricultural Credit Outlook
Publication Date: January 2025
Article ID: PAER-2025-06

Authors: Joshua Strine, PhD Student; Todd Kuethe, Professor of Agricultural Economics and Schrader Chair in Farmland Economics

Summary: Despite lower interest rates, agricultural credit market conditions weakened in 2024, with rising loan demand, declining repayment rates, and reduced fund availability signaling challenges for 2025. While short-term loan rates may continue to decline, farmers face tighter operating margins and financial strain heading into the new year.
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2025 Purdue Crop Cost and Return Guide
Publication Date: January 2025
Article ID: PAER-2025-07

Author: Michael Langemeier, Professor of Agricultural Economics

Summary: Production costs and breakeven prices in 2025 are expected to be similar to those experienced in 2024. However, production costs are still considerably higher than what they were prior to the advent of COVID-19.
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2025 Farmland and Cash Rent Outlook
Publication Date: January 2025
Article ID: PAER-2025-08

Author: Todd Kuethe, Professor of Agricultural Economics and Schrader Chair in Farmland Economics

Summary: Indiana farmland values reached record highs in 2024 but showed slight declines, with further softening expected due to lower farm incomes, reduced crop prices, and high interest rates. Cash rental rates are also under pressure as tighter margins leave farmers with less capital for land expenses in 2025.
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“What to Watch” in Dairy Markets in 2025
Publication Date: January 2025
Article ID: PAER-2025-09

Author: Nicole Olynk Widmar, Professor & Interim Department Head in Agricultural Economics

Summary: Strong domestic demand is expected to support relatively stable prices in dairy markets, but a variety of factors – both domestic and international – should be watched in 2025.
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Analysis of Labor Market Outcomes during the COVID-19 Pandemic in Eight Countries
Publication Date: January 2025
Article ID: PAER-2025-10

Author: Laura Montenovo, Assistant Professor of Agricultural Economics

Summary: Pre-pandemic job characteristics and social distancing policies significantly influenced employment changes across eight countries during COVID-19, with employer behavior (labor demand) driving job losses more than worker decisions (labor supply).
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Does a higher standard deduction decrease cash donations and volunteering?
Publication Date: October 2024
Article ID: PAER-2024-26

Author: Laura Montenovo, Assistant Professor in the Department of Agricultural Economics

Summary: Tax policy shapes individuals’ incentives to give to charities. In fact, taxpayers can deduct charitable cash contributions as an itemized deduction, which decreases their taxable income and leads to a lower tax bill. Itemizing deductions, however, is not convenient for all taxpayers. Moreover, the standard deduction is the better option for those whose total itemized deductions for eligible expenses are lower than the current standard deduction. Taxpayers choose between the standard deduction and itemized deductions based on which yields the lower amount of taxable income and, hence, tax liability.
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Farmland Prices Increase Despite Downward Pressure
Publication Date: August 2024
Article ID: PAER-2024-22

Todd Kuethe, Professor, Schrader Endowed Chair in Farmland Economics

Summary: Indiana farmland prices reached record highs in 2024, with top-quality land averaging $14,392 per acre, a 4.8% increase from 2023, according to the Purdue Farmland Value and Cash Rent Survey. Regional variations and market forces like high interest rates and low land supply influenced the market, while long-term projections suggest continued modest growth. Transition land saw a significant 21.6% rise, while recreational land values dipped slightly.
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Trends in Farmland Price to Rent Ratios in Indiana, 2024
Publication Date: August 2024
Article ID: PAER-2024-23

Michael Langemeier, Professor of Agricultural Economics

Summary: Farmland prices in west central Indiana increased slightly in 2024 (0.2%) and are 19.7% above the previous peak in 2014. Compared to the farmland price in 2007, current farmland prices in west central Indiana are 187% higher. Farmland prices are influenced by many factors, including net income, growth in earnings, crop and livestock prices, interest rates, alternative investment returns, inflation, liquidity, agricultural policy, and energy policy. Cash rent, which is influenced by net return to land, along with interest rates, is often referred to as a fundamental factor impacting farmland prices.
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Farmland Conversion in Indiana
Publication Date: August 2024
Article ID: PAER-2024-24

Todd Kuethe, Professor, Schrader Endowed Chair in Farmland Economics; and Megan Hughes, Graduate Research Assistant

Summary: Farmland conversion is a key factor influencing Indiana's farmland market in 2024, with large public and private projects driving up land prices. This article explores the impact of land transitioning out of agriculture on market values, comparing current trends to historical data. Discover how the demand for development, coupled with economic forces like interest rates and crop prices, is shaping the future of Indiana's farmland and its availability for agricultural production.
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Research Spotlight: The Impact of Solar Energy on Indiana Farmland Prices
Publication Date: August 2024
Article ID: PAER-2024-25

Binayak Kunwar, Graduate Research Assistant

Summary: As solar energy production grows, farmers' interest in leasing land for solar projects is rising, potentially driving up farmland values. This research thesis summarizes a hedonic price model analysis that reveals a positive price premium for farmland near solar generation facilities, with the strongest effects seen in high-value land. Understanding these dynamics is crucial for landowners, farmers, and policymakers as solar energy expands across the state.
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Indiana Labor Market Trends Pre- and Post-COVID-19
Publication Date: July 2024
Article ID: PAER-2024-21

Laura Montenovo, Assistant Professor in the Department of Agricultural Economics

Summary: This report examines the evolution of Indiana’s labor market from 2014 to 2023, highlighting the significant impact of the COVID-19 pandemic in 2020, a swift recovery and growth in labor demand post-2021, and a return to pre-pandemic trends starting in 2023. Key indicators such as unemployment rates, employment levels, employment churn, and earnings are analyzed to understand these trends.
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The Purdue Agricultural Economics Report is a quarterly publication written by faculty and staff from the Department Agricultural Economics at Purdue University.

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