When 36 acres of northwest Iowa farmland came up for auction in December, Bob Wassenaar knew he had to have it. Plots in this region rarely go on the market, and the land — with fertile soil and gentle slopes for drainage — is only a mile from a feedlot that he used to own and has since passed down to his sons. But competition for the land was fierce. Four other bidders quickly pushed up the price at the auction. The $1.13 million Mr. Wassenaar ultimately paid is considered to make it the most expensive sale of Iowa farmland, on a per acre basis. He never had any intention to grow and sell crops. Since buying the land, he has rented it out to his sons to grow more feed for the cattle that they fatten. "If you are just going to buy that land and crop farm, no, it won't work," Mr. Wassenaar said. "It don't add up."

As agricultural costs rise and the prices for corn, soybean and other cash crops fail to keep pace, farmers are increasingly treating their land as real estate investments, focusing on the value of the soil — not what can be grown from it. Traditionally, the value of farmland was mostly based on the profitability of its crop production, said Rabail Chandio, an assistant professor of economics at Iowa State University. Now many owners treat farmland as a separate asset, she said, divorced from the crops grown on it, instead of a farm input, like seeds and fertilizer. It is keeping land values high and helping to stave off waves of bankruptcies and collapses that plagued American agriculture four decades ago. Most American crop farmers will lose money in 2026, the third straight year of losses. Farm income is down and debt is increasing, according to the Agriculture Department. Farm loan delinquency rates have ticked up, the Federal Reserve Bank of Kansas City found. At the same time, land value is on the rise. The Agriculture Department says the value of cropland has risen a whopping 47 percent since 2020. Some of the most valuable land is in Iowa, which averages $10,700 an acre, federal data shows, compared with the national average of $6,020.

Mark Zomer was the auctioneer of the plot that Mr. Wassenaar bought, and he sells much of the farmland in northwest Iowa. Two-thirds of his sales are to nearby farmers looking to add to their portfolio. But he estimated that up to a third of sales are to investors, who then rent the land out to local farmers. While some farmers are struggling to generate enough operating capital to pay for day-to-day expenses, the agricultural economy is staying afloat because of the equity they have in their land. Farm bankruptcies were up 16 percent in the first half of 2026 compared with the first half of 2025, according to Epiq AACER, a bankruptcy data provider, but are still on a pace to be lower than the number of farm bankruptcies in every year of the 2010s. Today, 84 percent of Iowa farmland is owned debt-free. At the beginning of the 1980s farm crisis — when many farmers faced annual interest payments that exceeded their crop revenue and the rate of farmer suicides soared — the figure was only 62 percent.