Farmland values across Illinois are up 14% in the first half of 2011 versus a year earlier, and the average value of excellent-quality farmland has reached the $10,000-per-acre milestone. That's according to a midyear "snapshot" survey of members of the Illinois Society of Professional Farm Managers and Rural Appraisers.
According to the survey, $8,500 is the new average for farmland rated as good quality, with $7,200 the new level for average-quality farmland and $5,800 the new average for fair-quality farmland. Excellent-quality land produces more than 190 bu. of corn per acre; good-quality land, 170 to 190 bu.; average quality, 150 to 170 bu.; and fair quality, below 150 bu. per acre.
Survey respondents said the volume of farmland offered for sale in the first half of the year was up slightly versus the first half of 2010. Most expect an increase in the number of properties offered for sale in the last half of the year. They also expect that prices paid for farmland will increase during the next 12 months. One-third expect prices will increase more than 5%, while 48% expect an increase of up to 5%. Only 6% of respondents expect prices to decline.
High commodity prices and low interest rates are most commonly cited as reasons for the rise in farmland values. In that regard, 58% expect corn prices to average between $6 and $7 per bushel for the 2011 crop. For soybeans, 56% expect prices to hover between $13 and $14 per bushel.
The "snapshot" survey supplements the Society's larger and more exhaustive survey efforts conducted at year-end, which highlight statewide farmland values and cash rents in detail.
Respondents also indicate they expect 2012 cash rent levels to rise versus 2011 rates. For excellent-quality farmland, respondents say average cash rent was $329 per acre in 2011, with an average of $367 an acre expected for 2012. For good-quality land, $285 was the 2011 average, with $321 expected for 2012. For average-quality farmland. $241 was the 2011 average, with $269 expected for 2012. For fair-quality farmland, $190 was the 2011 average, with $214 expected for 2012.
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