Tennessee Farm Values Are Surging Faster Than Any Other State

Farmland values continue to rise, with agricultural real estate values surging nearly 6% in one state last year, according to a new report from the U.S. Department of Agriculture.

Across the country, median farmland prices hit $6,020 per acre this year, a 3.4% increase from 2025, according to the July 2026 Land Values report.

Every state surveyed saw an increase in farmland value, but Tennessee saw the largest percentage increase over the past year. Farmland rose from $6,150 per acre in 2025 to $6,500 in 2026—a 5.7% increase overall.

That follows a similar increase in the state between 2024 and 2025, when the value of Tennessee farmland rose a healthy 7.7%.

Farmland is priced higher per acre in other states—including Rhode Island, which had the highest average price per acre at $23,600, and Iowa, where the average price for an acre was $10,100. But Tennessee saw the greatest year-over-year price increases.

The report assesses a variety of agricultural land types, including farm real estate value, which is the value at which all land and buildings used for agricultural production could be sold under current market conditions.

It also breaks down the value of land used for pastures or grazing, as opposed to land used to produce crops.

Nationally, cropland value was up 3.3% annually to $6,020 this year, while pasture value rose 4.2% to $2,000.

Why farmland is so valuable in Tennessee

The rapid growth in Tennessee's land values is driven by a unique convergence of factors. One of the major pieces of the puzzle is the increase in development the state has seen in the last couple of decades.

A report from Coldwell Bankers Southern Realty found that 20 years ago, land parcels near Murfreesboro, TN, sold for between $4,000 and $6,000 an acre. But these days, following the city's expansion, those same plots are commanding $25,000 to $40,000 an acre.

A report from the University of Tennessee at Knoxville's Boyd Center for Business and Economic Research found that the state is seeing an unprecedented influx of residents. Tennessee added 80,000 new residents during the 2023-2024 year, the largest increase in residents since 2008.

That's increased demand for new homes in the state, which has helped to ratchet up land prices. The Nashville metro area ranked 3rd among areas with the highest percentage of new-construction housing on the market.

Newcomers are drawn to the state's lack of income tax. And though sales tax is relatively high, at 7%, property taxes have remained low. Corporate taxes are at a flat 6.5%.

These favorable taxes have led many corporations to move their headquarters to Tennessee's urban centers. In 2024, Oracle announced it was moving from Austin to Nashville, joining companies like Amazon and Dell.