These Are the Top 10 Best States for Farmland in the US
These Are the Top 10 Best States for Farmland in the US

These Are the Top 10 Best States for Farmland in the US

Montana, Oklahoma, and Wyoming offer the most affordable farmland, but Bill Gates prefers his tracts out in Iowa and California.

Liz Aldrich

Updated Jan 31, 2023

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Forget Wall Street—have you thought about making your millions in rural Iowa?

There's a reason Bill Gates is the largest private owner of farmland in the country: it's a great investment. Not only is farmland one of the most stable and secure assets you can add to your portfolio, but it also offers a range of diversification benefits. We all need to eat, even in times of economic uncertainty, making it a recession-resistant asset that can help you preserve wealth during a market crash. What's more, farm income tends to go up when prices rise, making it a popular inflation hedge.

Not only does this investment have the potential to offer growth in the form of land value appreciation, but you can also earn passive income through crop yields and rental income.

Before you start buying up tractors and fertilizer, though, you have to decide where you want to buy farmland. Some states offer beautiful farmland, but the cost of operating a farm is high, while others offer cheap farmland that doesn't produce much in the way of income. You want a solid balance of both to maximize your return on investment (ROI). With that in mind, here are the best states for farmland in 2021.

The best states for farmland

When you're looking for the best states for farmland in the US, you want to consider a range of factors: the state's top agricultural products and their profitability, the cost of farmland (as well as property taxes and the cost and availability of labor), rural infrastructure, and the availability of farmland. 

We weighed each of these factors equally, using the USDA's 2020 land values research and LawnStarter's 2021 Best States to Start a Farm study as resources, to develop this list of the ten best states for farmland. Let's dig in.


Coming in at the lowest cost per acre, Montana is one of the best states for farmland if you're looking to buy more land with less money. Farmland investors know it, too—it had the second-largest increase in number of farms last year, so hop on the deals in big sky country while you still can.

According to the USDA, the average farmland real estate value per acre across the entire U.S. was $3,160 in 2020, while the average in Montana was just $915. While a plot of land isn't worth anywhere near as much in Montana as it would be in, say, California, getting in at a seriously low price point means potential for a higher ROI. When it comes to cultivating the land to add value, wheat and beef are some of Montana's biggest commodities, along with sheep and wool, so ranching is a popular option.


Kansas is one of the most attractive places to invest in farmland thanks to its land's viability and well-developed rural infrastructure. It's the country's leader in grain production and one of the top producers of wheat as well. About 90% of the sunflower state's land is dedicated to farming.

Land in the most productive areas of Kansas won't come cheaply, but farm income has been on the rise in this state for the past couple of years, thanks to increases in grain prices. Cropland values, in particular, have jumped in recent years, so when it comes to the best states for farmland, this is one you want to get into sooner rather than later.


Oklahoma currently sits at the lowest cost per acre among the best states for farmland in the U.S., so this is another state with farmland you can invest in at a low price point. That said, farm income is also relatively low in Oklahoma, but it does have the rural infrastructure and developed farmland communities needed to support growth.

As another top producer of wheat and cattle, Oklahoma is a great place to invest in wheat cropland and ranchland.

South Dakota

South Dakota is ranked in the top five best states for farmland in the U.S. regarding high farm income. Paired with a lower-than-average cost per acre of farmland ($2,010 versus the national average of $3,160), it's possible to squeeze a lot of value out of an investment in the Mount Rushmore state.

Farms in South Dakota tend to be much larger than your typical small family farm, and corn is one of the state's major agricultural products.

North Dakota

Another state that produces some of the highest farm income in the land, North Dakota is a top producer of dry beans and honey. Farmland is even cheaper in North Dakota than South Dakota, making it one of the best states for farmland regarding ROI, especially because the state's well-developed agricultural infrastructure.

This is another state where about 90% of the land is used for agriculture. The Red River Valley region of North Dakota is particularly known for its fertile soil, however, that's also where farmland prices are highest.


Texas is another affordable state for farmland, although prices have been increasing in recent years, especially for cropland. It's one of the best states for farmland if you're growing cotton, thanks to its lengthy hot seasons (nearly year-round) and lack of overcast weather. The lone star state is also a big producer of beef cattle.


The state of Texas also provides generous property tax exemptions for certain farmers and ranchers, making farmland even cheaper. Thanks to developed agricultural infrastructure, getting access to utilities in even the most rural of places shouldn't be a problem.


Iowa is one of the most popular states for investing in U.S. farmland for several reasons. For starters, this corn belt state is a leading producer of both corn and soybeans, the two most lucrative crops in the country. Another is that Iowa has some of the most sustainable farming practices of any state. The state also ranks top five in the nation for number of farm workers per capita, so finding labor is easy.

That said, the lucrative nature of farming in Iowa also makes farmland very expensive in this state. The average cost per acre in 2020 was a towering $7,070, so unless you've got a lot of startup capital, you might want to look into more affordable ways to invest in sustainable agriculture in Iowa, such as crowdfunding.


The cost of 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 tobacco or soybeans or raise livestock. Tobacco is a particularly profitable crop thanks to the high and resilient demand for tobacco products and the fact that tobacco is easy to grow. Tobacco plants are resilient under a range of different weather conditions.

Wheat and corn are also popular crops to grow in Kentucky, and thanks to the long list of bourbon distilleries in the state, there is always demand for these products.


If you believe bigger is better, Wyoming is one of the best states for farmland. They don't call it "Big Wyoming" for no reason—this state boasts the largest average farm size in the U.S. and the lowest cost per acre. On average, an acre of farmland in Wyoming will cost you just $750, less than one-fourth of the national average.

Wyoming also has some of the lowest property taxes in the country and no state income tax. All of this combined makes for high ROI potential.


California is one of the most expensive states in the country, and this is certainly reflected by its farmland prices. On average, it'll cost you $10,000 per acre to buy farmland in the golden state, but there's still potential for significant ROI. This state is number one in the country for average per-farm income and boasts the most farm workers per capita in the U.S.

This west coast state is one of the country's largest producers of fruits, vegetables, and nuts—its farms grow two-thirds of the fruit in the U.S. It also produces over a third of the country's cannabis, one of the most profitable crops out there. However, California has the lowest average monthly precipitation of any state, and droughts could render its farmland in poor or mediocre condition.

Property tax dilemma

Lower taxes or lower profit?

How to invest in farmland without buying land

Suppose you're not quite ready to buy your own land. You might need more startup cash, don't have the agricultural knowledge necessary to grow profitable crops (our study on farmland will fix that), or just don't want to deal with all the work that goes into operating a farm. There are plenty of ways to invest in farmland without buying a farm or gain exposure to residential and commercial real estate with REITs or eREITs.

Buying shares in the best farmland REITs or investing in the top agricultural ETFs are two easy ways to add farmland exposure to your portfolio today. Investing directly in farmland and reaping the full diversification benefits of this asset class is easy with platforms like FarmTogether that let you invest in a portion of an already operating farm that's already generating revenue.

Not only does this investment have the potential to offer growth in the form of land value appreciation, but you can also earn passive income through crop yields and rental income.