In February 2016, the Federal Reserve Bank of St. Louis reported that a seven-state geography that includes Arkansas, Illinois, Indiana, Kentucky, Mississippi, Missouri and Tennessee saw farmland values slip 2.5% from a year earlier.
Did Illinois not get the memo?
The Land of Lincoln has been the land of scorching hot farmland auctions so far in 2016. Recent highlights include two tracts of land in Sangamon County that went for more than $13,000 per acre, including a 107-acre tract for $13,879 per acre and an 80-acre tract for $13,313 per acre.
“We had both farmers and investors competing vigorously for this land, and ultimately, the nine tracts of land were divided among seven bidders,” according to Joe Bubon, president of Murry Wise Associates. “Interest was widespread, with a number of large investors from other areas bidding.”
Earlier in March, Farmland Partners Inc. announced it had acquired 22,100 acres near Paris, Ill., for a total of $197 million (a little more than $8,900 per acre).
According to University of Illinois research, the average value of an acre of Illinois farmland is $7,500. Researcher Bradley Zwilling says that represents a slight dip (-0.3%) from 2014, a rare decline for the state.
“The 2015 decrease is the first since 2009 and only the second decrease since 1987,” he says.
R.D. Schrader, president of Schrader Real Estate and Auction Company, says local specifics can easily ramp up competitive bidding quickly and override state or regional trends.
“We’re seeing some results that you wouldn’t expect based on some of the commentary and forecasts I’ve been seeing. Nobody can predict what’s ahead, but the reality we’re seeing on the ground is that farmers and investors alike see farmland as a good long term investment.”
For AgWeb’s Farmland Value Guide, which shows average cropland and pasture values for each of the lower 48 states, visit www.agweb.com/land/farmland-value-guide/.