Agricultural land values in Oregon and Washington have lagged behind inflation

At the same time, Idaho saw a slight increase in metrics driven by relatively high pasture ratings, while prices in California remained practically unchanged. Adjusted for inflation, the value of arable land in the Pacific Northwest and California decreased, with non-irrigated plots depreciating faster than irrigated ones. Pastures gained in value in Idaho, California, and Oregon, but fell in price in Washington, where the total value of agricultural real estate decreased across all categories. Across the U.S. as a whole, the value of real estate and arable land remained stable, while pastures appreciated.

Dan Bigelow, an agricultural economist from the OSU Extension Service and the article's author, explained that pastures showed better performance due to rising incomes of livestock farmers, especially cattle producers under active market conditions. The article also notes the impact of water supply issues due to drought on the market for irrigated land, as mentioned by AgWest Farm Credit. Bigelow's analysis complements USDA data showing moderate nominal growth: for example, in Oregon, real estate rose by 2.6% to reach $3,880 per acre, but adjusted for inflation, it decreased by 0.3%.

For Oregon, this marked the second consecutive year of real decline—a sequence recorded for the first time since 1997, when the USDA launched its current land valuation program. Over the past five years, the nominal value in the state has grown by 31.5%, but in real terms, the increase was only 9.1%. According to Bigelow, USDA data are typically lower than actual transaction prices, although both valuations and sales prices in Oregon have roughly doubled since 2001.

The expert notes that agricultural land is considered a reliable investment during unstable periods. Nevertheless, price pressure is exerted by high costs for means of production, droughts, wildfires, and interest rate hikes by the Federal Reserve. At the same time, price growth may be supported by government support for farmers and non-agricultural land use for data centers and solar energy. Since the pandemic, land in Oregon's Willamette Valley has been selling for approximately $15,000 to $17,000 per acre thanks to fertile soils, high-yielding crops, and high demand from the population focused on potential land development.