Your Precious Land
Mike Walsten has covered major business trends in agriculture for more than 40 years.
Illinois Farmland Values Edge Slightly Higher
Aug 28, 2013
The value of Illinois farmland rose 2% to 3% the first half of 2013, according to a survey conducted the Illinois Society of Professional Farm Managers and Rural Appraisers and the University of Illinois. "On July 1, farmland prices averaged $13,200 an acre for excellent-quality farmland, $11,200 an acre for good-quality farmland, $9,000 for average-quality land and $8,300 an acre for fair-quality farmland," says survey coordinator Dale Aupperle, AFM, ARA, Heartland Ag Group LTD., Forsyth, Illinois. "This is an increase of 3% for excellent- and good-quality farmland, 2.5% for average-quality farmland and 1.9% for fair-quality land. These are not at the level of increases we've seen in recent years, but they are still upward," he notes.
"There was a tremendous push on land sales at the end of 2012 because of uncertainties concerning income tax treatment in 2013 and beyond," he comments. "This led to a great deal of farmland being sold last year that might have otherwise been available to the market in 2013. As a result, there is still a demand for farmland but not much available for sale." Looking ahead, 23% of survey respondents say they expect the volume of sales in the last half of 2013 to rise compared to the first half of 2013, while 43% expect the volume to remain the same and 34% expect less volume.
The survey, conducted in conjunction with Dr. Gary Schnitkey, University of Illinois farm management specialist, found 73% of farmland buyers are farmers and 12% are local investors.
Survey respondents are divided in how they expect prices will perform over the next 12 months. Twenty percent expect farmland prices will increase, 41% expect prices will remain unchanged and 39% expect farmland prices will decline. Of the 39% expecting a decline, 77% expect a price decrease from 0% to 5%.
Survey respondents also indicate they expect cash rents to decline slightly for 2014 compared to 2013. Respondents indicate that excellent-quality farmland had an average cash rent of $388 an acre in 2013 and expect that rent to slip to $374 in 2014. Good-quality farmland had a $332 average per acre in 2013 with an expected average in 2014 of $318 an acre. Average-quality farmland had a $318 average per acre in 2013 and is expected to average $278 in 2014. Fair- quality farmland had an average of $224 per acre in 2013 and is expected to average $212 per acre in 2014.
Note: In a normal year, excellent-quality farmland averages more than 190 bushels of corn per acre, good-quality farmland averages between 170 and 190 bushels per acre, average-quality farmland averages between 150 and 170 bushels per acre, and fair-quality farmland averages below 150 bushels per acre.
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