Center for Agriculture and the Economy
Leveraging expertise from the Kansas City Fed, the Center provides timely analysis of industry developments and conducts ongoing research on the agricultural economy.
Demand for stable access to water has supported a rise in the price differential for Tenth District irrigated farmland
February 12, 2026
By Ayesha Cooray
According to results from the Tenth District Survey of Agricultural Credit Conditions, land values remained stable in 2025, with a premium for irrigated farmland. In fact, the price differential between irrigated and non-irrigated farmland has increased five-fold in the last two decades. The rise in the premium for irrigated farmland has been supported by heightened demand for stable access to water given more severe droughts, depletion of existing water resources, and the pursuit of higher yields. Rather than large-scale expansion of irrigated acreage, mounting concerns about water scarcity have altered investment decisions and production practices towards the adoption of more efficient irrigation technology and shifting regional cropping patterns.
Note: The premium for irrigated farmland is calculated as the difference between the survey average of irrigated and non-irrigated land values (per acre). This difference is indexed to 2025 to account for inflation. Exceptional drought refers to the highest intensity level on the U.S. Drought Monitor, indicating a 1-in-100-year event.
Sources: Federal Reserve Surveys of Agricultural Credit Conditions; National Integrated Drought Information System’s U.S. Drought Monitor.
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Through regular surveys, analysis and connections across the industry, the Kansas City Fed has had a longstanding focus on U.S. and global agriculture. Leveraging this expertise, the Center for Agriculture and the Economy serves as a resource within the Federal Reserve System by providing timely analysis of industry developments and conducting ongoing research on the agricultural economy. The Kansas City Fed is committed to understanding developments in the agricultural economy and gathering perspectives from rural America in order to include them in discussions on the national economy.
The Kansas City Fed's Ag Connection
Agriculture is central to the Kansas City Fed’s 10th District’s economy, from farm production and food manufacturing to agricultural banking and finance. Through its regular surveys, analysis and connections across the industry, the Kansas City Fed has had a longstanding focus on the U.S. and global agricultural economy. At the same time, connecting with stakeholders and ag industry professionals through events, round tables and conversations is critical to the Bank’s work.