Where is Farming Land the Cheapest? Revealing the Top States to Buy Farmland
Farmland is an excellent investment. In addition to being one of the safest and most reliable investments you can add to your portfolio, farmland also provides many diversification advantages.
Even in difficult economic times, everyone needs to eat. Thus, food is a recession-resistant asset that can help protect your capital amid a market meltdown. Additionally, rising prices typically increase agricultural income, making it a well-liked inflation hedge. However, you must choose where to purchase acreage before you begin stocking up on tractors and fertilizer.
Some areas have lovely farmland, but doing business on a farm might be expensive. Other places have cheap land that generates little cash. To optimize your return on investment, you want to strike a good balance between the two (ROI). So if you’ve wondered “where is farming land the cheapest?” this article will give you the answers and provide insight into the reasons why these locations may be ideal for farmers looking to purchase cheap land for sale.
How Farming Land Can Be Affordable
The price of farming land varies greatly depending on a variety of factors. In states where the economy is in decline, agricultural land may be more affordable due to fewer buyers and less competition for space.
Additionally, rural areas or regions with sparsely populated counties tend to offer more competitive prices, as there isn’t much demand for their products.
Finally, states with more relaxed regulations regarding land use and agricultural practices may be more accessible to farmers looking to purchase or lease land.
Where Is the Cheapest Rural Land?
Let’s find out where you should look when deciding to buy cheap agricultural land.
Texas tops the list of states offering cheap farmland. With its lengthy hot seasons and mild winters, the Lone Star State is especially ideal for growing cotton. The state is also a big beef cattle producer, so the price per acre may be lower due to the high demand for grazing land.
Additionally, as it does for certain hunting land parcels, the state provides generous property tax exemptions for specific farmers and ranchers, which aren’t available to those buying residential land or commercial real estate, making farmland even more attractive.
California might not be the state with the cheapest land for sale, but it certainly is the one that ensures the highest return on investment.
On average, buying farmland in the Golden State will cost you $10,000 per acre. That being said, there’s still potential for significant ROI due to California being number one in the country for average per-farm income and boasting the most farm workers per capita in the US.
Thanks to its fertile soil, California is also the leading producer of fruits, vegetables, and nuts in the nation, growing two-thirds of the country’s fruit alone. The state also produces over a third of the country’s cannabis, one of the most profitable crops out there.
New Mexico is another great option for farmers looking to buy land. On average, you can expect to pay $610 for an acre of farmland in the Land of Enchantment, making it one of the cheapest on the western side of the country.
In addition to its low cost-per-acre, New Mexico also offers some of the most favorable land use regulations in the US. The state allows farmers to use their properties for various purposes, from raising livestock to cultivating crops and even growing hemp.
Known for its rich agricultural history, Iowa is one of the cheapest places to buy farmland. The price of buying land varies greatly throughout the state, but overall it is much lower than average.
This corn belt state is a leading producer of corn and soybeans, the two most lucrative crops in the country, making it an attractive place for farmers to invest in.
Additionally, Iowa has some of the most sustainable farming practices of any state and great resources for aspiring farmers. On top of it all, the state ranks top five in the nation for the number of farm workers per capita, making labor accessible.
Montana is one of the best states for farmland if you are looking to buy cheap land on the Western Coast. Coming in at the lowest price per acre, it had the second-largest increase in the number of farms last year.
According to the USDA, the average farmland real estate value per acre across the entire US was $3,800 in 2022, while the average farmland prices in Montana were just above $1030.
This tremendous price difference includes less population density, a favorable business environment, and fewer regulations. The state also offers plenty of wide open spaces and productive soils that can serve as a blank canvas for farming.
Kansas is another great state for agriculture, and the price of farmland in this region is also quite affordable. Much like Montana, Kansas has plenty of wide open spaces and well-developed rural infrastructure, making it an attractive option for farmers looking to purchase land.
The average cost of farmland real estate per acre in Kansas was $2,630. This is about 40% cheaper than the national average.
The state is also one of the most productive regarding grain production and wheat farming. It’s also the country’s leader in grain production, making it an ideal place to invest in farmland. Additionally, the cost of land for sale has risen due to increased grain prices and strong demand for agricultural products.
Oklahoma currently sits at the lowest cost per acre among the best states for farmland in the US, so this is another state to consider when looking to buy land for agricultural purposes.
That being said, farm income is also relatively low in Oklahoma, but it does have the rural infrastructure and developed farmland communities needed to support growth.
The average cost of farmland real estate per acre in Oklahoma was just $2,250. This is about 47% lower than the national average.
As another top producer of cattle and wheat, Oklahoma is a great place to invest in wheat cropland and ranchland. Moreover, farmers looking to invest in the region can benefit from state incentives such as tax credits and grants that are designed to help agricultural businesses develop in the area.
South Dakota is one of the top five best states for farmland in the U.S., with high farm income and a lower-than-average cost per acre of farmland ($2,600 versus the national average of $3,800).
The state also offers plenty of opportunities to invest in larger farms that are well-suited to industrial agriculture and corn production.
Investing in agricultural land in South Dakota can be a great way to capitalize on the state’s favorable conditions for agriculture, as well as its lower cost of land. Additionally, South Dakota is a great place to invest due to its flourishing rural economy that has seen steady growth in recent years.
North Dakota has the most affordable land on the eastern side of the country. It’s also a top producer of dry beans and honey, making it an attractive place to invest for farmers looking for higher ROIs.
The average price of farmland real estate per acre is $2,050 — about 45% lower than the national average.
North Dakota also offers some of the lowest land prices due to a relatively low population density and well-developed rural infrastructure that supports agricultural businesses in the state.
Alabama offers some of the most affordable agricultural lands in the southern part of the United States. The state’s agricultural industry is booming and this makes it an appealing option for those interested in purchasing or leasing farmland.
In addition, Alabama also boasts attractive tax incentives that make it a desirable location for agriculture-based businesses.
Kentucky is another state that offers relatively affordable farming land. Like Alabama, Kentucky offers tax incentives to those wanting to establish an agricultural business.
This can be a significant factor in determining whether or not to purchase or lease land in this area. In addition, due to its proximity to major cities such as Louisville and Lexington, Kentucky is a convenient option for those looking to invest in farming.
The cost of buying farmland in Kentucky is just slightly above the national average, but it’s one of the best states for farmland if you’re looking to grow soybeans or tobacco or raise livestock.
Tobacco, in particular, is a crop that pays off thanks to the high and resilient demand for tobacco products and the fact that tobacco is easy to grow. Even though farmland real estate per acre in Kentucky comes at $4,350, which is higher than the national average, the state offers amazing potential for achieving high ROI.
Wheat and corn are other popular types of crop to grow in Kentucky, and thanks to the long list of bourbon distilleries in the state, there is always demand for these products.
Investing in agricultural land in Kentucky can be a great way to capitalize on the region’s favorable conditions for farming and its relatively low cost of land.
The Equality State is a great place to invest in farmland, offering the lowest cost per acre and the largest average farm size in the U.S. Additionally, Wyoming also has some of the lowest property taxes in the country and no state income tax, making it an attractive option for those looking to invest in farmland.
The average price of farmland real estate in Wyoming was just $850. This is about 76% lower than the national average.
Investing in agricultural land in Wyoming can be a great way to capitalize on the state’s favorable conditions for farming as well as its low cost of land. With its low taxes and no state income tax, Wyoming offers high ROI potential for those investing in farmland.
Top Factors to Consider when Buying Farming Land
When buying farming land, there are several factors to consider other than the price.
Location is the most important factor; it should be close enough that you can manage your farm easily but far away enough that you won’t suffer too much from external influences such as pests and bad weather.
Make sure you have adequate acreage to produce enough yield for a profitable sale.
The Soil Quality and Drainage
Ideally, the farm should have well-draining soil with good fertility that is suitable for the crop you want to plant.
Climate and Weather Conditions
Climate and weather conditions are also among the most important factors to consider as they can greatly impact the success of your farm.
Having good roads to your farm makes it easier to transport goods and supplies in and out of the area, as well as provides a more convenient route for customers that are interested in purchasing your product.
Good roads will also make it easier for you to get help when needed. In areas with limited or no access to roads, getting assistance can be difficult and expensive.
Having access to utilities and infrastructure, such as electricity and water lines, is also important. These are necessary to operate a successful farm.
Legal and Regulatory Factors
Make sure to research the legal requirements for owning and operating a farm, as well as any approved or restricted uses for the land. This can help ensure that you are compliant with all regulations.
Investing in agricultural land can be a great opportunity to capitalize on the current market, with some states offering highly affordable farmland. North Dakota and Wyoming are two of the most cost-effective states for farming land, followed by Alabama and Kentucky.
All four states offer tax incentives and other benefits that make them attractive places to invest in farmland. Before investing, it is important to research the local market and ensure that the land purchased meets all agricultural use requirements.
Discount Lots can help you find the perfect farmland for your needs and help you purchase it at a great price. We have a team of expert real estate agents who understand the nuances of agricultural land, so they can help guide you through finding and purchasing the right property.
Our goal is to make investing in agricultural land easy and stress-free.
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