Long-term farmland value expectations climbed to a record high in September, according to the latest reading of the Purdue University/CME Group Ag Economy Barometer.

Joana Colussi, an agricultural economist with Purdue's Center for Commercial Agriculture, said farmers surveyed in the monthly index now expect farmland values to remain strong well into the future. The September figure marks the highest level recorded for the long-term farmland value expectations index since the barometer began tracking it.

"Alternative investments, interest rates, and inflation were all mentioned as the three factors having the biggest influence" on producers' outlook, Colussi said.

Why do the three named factors matter for growers?

Each of the drivers producers cited points to farmland's role as a financial asset as much as a productive one. When alternative investments — stocks, bonds, and other asset classes — underperform or carry risk, farmland tends to attract capital, supporting values. Interest rates shape both the cost of borrowing against land and the return investors demand from competing assets. Inflation, the third factor, historically boosts demand for hard assets such as real estate, farmland included, as a store of value.

For row-crop and livestock producers, the expectation of sustained land strength carries direct consequences for balance sheets. Higher farmland values raise collateral capacity for operating credit and equipment loans, but they also raise the entry barrier for young and beginning farmers and can lift cash rental rates that tenant operators must cover from commodity revenue.

What is the Ag Economy Barometer?

The barometer is a monthly measure of farmer sentiment produced by Purdue University's Center for Commercial Agriculture in partnership with CME Group. It surveys U.S. agricultural producers and reports indexes covering current conditions, future expectations, and specific topics — including the long-term farmland value expectations index that set its record in September.

Readers should note the distinction between the two kinds of land-value information the survey produces. The long-term expectations index reflects producers' beliefs about where farmland values are headed over a multi-year horizon — a forecast, not a transaction result. It is separate from reported sale prices, USDA land-value surveys, or county-level appraisal data, which measure what buyers actually paid within a defined reporting window. Expectations can diverge from market outcomes, particularly when interest rate policy shifts.

How should producers read a record expectations reading?

A record high in an expectations index signals confidence, and that confidence itself can influence behavior: lenders, land buyers, and investors all watch the same sentiment data. But sentiment is a leading indicator, not a guarantee. The September record rests on producers' views of interest rates, inflation, and competing investments — all of which remain subject to Federal Reserve policy and broader macroeconomic conditions beyond the farm gate.

Colussi and Purdue's Center for Commercial Agriculture will report the next monthly barometer reading in October, giving growers and lenders a fresh data point on whether the record expectations for farmland values hold or soften.