Today, we’re looking at the data behind the headlines. David Widmar, managing partner at Agricultural Economic Insights, breaks down trends in the farm economy. He helps producers and others in the industry align with the current market conditions.
One of the headlines we discuss today: How do data centers or renewable energy arrays fit in the ag landscape?
The U.S. agricultural land market is entering a period of “cooling,” Widmar explains. He warns that a combination of high interest rates and tightening profit margins may soon force a market adjustment.
Widmar notes that the conversion of farmland into solar arrays has become a point of discussion in rural communities. As of 2025, about 300,000 acres of U.S. farmland have been converted to solar panels. He says the figure sounds significant, but remains small relative to other land-use programs like ethanol production.
“It’s a societal question at the end of the day,” Widmar says regarding the energy transition.
Despite the demand for energy projects and data centers, the broader farmland market is showing signs of a “cooling” trend. Widmar points to a disconnect between land prices and actual returns. Currently, farmland returns are hovering around roughly 2.5 percent, while safer investments like 10-year Treasuries offer yields closer to 4 percent.
This disparity, combined with high cash rents that are outstripping the profitability of crops like corn and soybeans, has created a “caution” phase for buyers.
“We’re in a period where we have to be very disciplined,” Widmar advises. “We have to be very choosy and picky. It’s not one of those environments where you can buy all the land or any piece of land on the market and get a return that meets your goals.”
