IRRIGATED CROPLAND MARKET STUDY – 2/2025
For this analysis, we researched the national, state, and local market areas for market data. We started with a macro analysis on the cropland market nationwide including current prices, tariffs, immigration, farm bills, and climate change. Then we focused on Arizona and the southwest market. Following this we discussed market value, rates of return, and market rent for the irrigated cropland market with a primary focus on Arizona.
National Market
The national agriculture market is anticipated to see growth in some sectors, and others will face challenges. Farm cash receipts, income that a farm receives from selling agricultural products, are predicted to decrease by $1.8 billion from 2024 to 2025. Crop cash receipts are expected to decrease to $239.6 billion, a decrease of about $5.6 billion from 2024 to 2025. The receipts for animal product are expected to increase to $275.4 billion for 2025, and increase of about $3.8 billion. Net farm income is anticipated to increase to $193.7 billion in 2025 after declining in 2023 and 2024.
In August of 2024, the USDA released the 2024 Land Values Summary Report. The average per acre for farms in the United States was $4,170, which was up about $200 per acre from 2023.
Croplands averaged about $5,570 per acre, an increase of about $250 per acre from 2023.
For Arizona, irrigated and non-irrigated cropland averaged $8,000 per acre, in 2023. This is an increase of $400 per acre from 2020 levels.
There are several challenges that the agriculture market faces in the future. This includes the recent tariff announcements which may spark a potential trade war, immigration reform, the extension of the Farm Bill, potential removal of USAID, and climate change.
Tariffs/Trade War
First, we will discuss tariffs, retaliatory tariffs, and the impact of a trade war. During the last trade war, farmers took substantial losses due to tariffs and retaliatory tariffs. According to the USDA, the tariffs caused nearly $26 billion in agriculture export losses from 2018 through 2019
https://www.capradio.org/news/npr/story?storyid=nx-s1-5288119#:~:text=According%20to%20the%20USDA’s%20economic,farmers%20could%20pay%20the%20costs
Similar to the first DJT administration, 25% tariffs have been announced on Mexico, Canada, and additional 10% China. These trading partners accounted for more than 40% of all imports in the United States in 2024. Retaliatory measures were announced by each country, with tariffs currently on hold for Mexico and Canada as negotiations continue. China has implemented a 15% tariff on coal and liquefied gas, and a 10% tariff on crude oil, agricultural machinery, and large cars. There are numerous articles and data showing the damage tariffs place on American farmers.
