IL Farmland Values Continue To Increase

According to the report issued at the recent 2011 Illinois Farmland Values Conference, high commodity prices and lack of good farmland for sale have kept prices paid for Illinois farmland on a continued upward path. The Illinois Society of Professional Farm Managers and Rural Appraisers sponsors the annual report.

The survey was conducted among Society members and assembled by the University of Illinois and reflects farmland sales activity and lease trends during 2010.

In an executive summary, Accredited Farm Manager, Don McCabe, Soy Capital Agricultural Services, Bourbonnais, IL, and general chairman of the event said, “There are two major points coming out of this year’s survey. The most striking is that this crop agriculture is financially strong and Illinois farmland values and lease trends are on the rise. The second is that there is more variation between regions and within regions from higher to lower productivity soils. Economic forces that are pushing the current broad rise in crop returns, rents, and land values are not uniformly affecting categories of farms or areas. Even from farm to farm in similar neighborhoods there can be differences based on lease type, farm operation and management.”

Estate sales still account for the majority (57%) of reasons land is being sold. Local farmers account for the majority (56%) of the buyers.

When asked if they believed that farmland prices would fall more than 20% in the next year, none of the respondents believed that the chances were greater than 10% while a full 58% believed the chance was very small.

McCabe notes that rental returns for 2010 rose from “modestly” to “significantly” based on increasing net returns to farm operations from increasing crop prices.

Copies of the complete 84 page report can be ordered online at ispfmra.org/landvalues.html. ◆