A really good material, fairly inexpensive, but works well for terrain is Owens Corning foam insulation. This stuff is made differently than the white foam you get in Michaels. Instead of being made up of little beads, it's a solid foam. So when you cut it instead of it turning into this beaded mess, it keeps a smoother edge and can also be sanded.
Many model railroad builders use this because it keeps a good shape and is light weight. It's most often used in building insulation and can be purchased at most building centers. The only problem with it is they don't carry it in the south! So the only way I can get it is to either travel north where they do sell it and drive it home, or get it shipped in. Which by the way, makes it a little more expensive than I want to pay.
So you might want to look into that assuming you can get it easily enough.