Illinois farmland values as well as sales activity "basically flattened" during the first half of 2017 with a trend that will apparently continue for the balance of the year, according to a survey done by the Illinois Society of Professional Farm Managers and Rural Appraisers (ISPFMRA). The annual mid-year "snapshot survey" of ISPFMRA members is conducted by Dr. Gary Schnitkey, with the University of Illinois Department of Agriculture and Consumer Economics.
"There was a very slight drop in farmland values, only 1.6% for excellent-quality land, in the first half of 2017" Schnitkey says, "with most respondents indicating this trend will continue through the balance of the year."
The survey shows good-quality land dropped 3.0% while average-quality land saw a drop of 3.8% and fair-quality land fell back 4.4%.
"At the same time, our members are telling us that the volume of farmland being sold in the first half of 2017 was the same as the last half of 2016 and they see no change in that level sales activity for the balance of this year," he states.
"The survey indicated prices paid for excellent-quality land in Illinois averaged $10,900 per acre as of July 1," notes David Klein, AFM, ALC, Soy Capital Ag Services, Bloomington, IL, who co-presented the information with Dr. Schnitkey. "Good-quality farmland averaged $8,900 with $6,900 being the average for average-quality land and $5,000 for fair-quality land."
Klein qualified the land categories by explaining that in a normal year, excellent-quality farmland averages over 190 bu. of corn per acre with a soil productivity index of 133 or higher. Good-quality farmland averages between 170 and 190 bu. per acre with a soil productivity for index of 117-132. Average-quality farmland averages between 150 and 170 bu. per acre with a soil productivity index of 100-116 and no irrigation, and fair-quality farmland averages below 150 bu. per acre with a soil productivity index under 100.
"Respondents expect slight decreases in rents going into 2018, reflecting the same trends as land values changes by productivity class," Klein states. "Rent paid per acre for excellent land will likely see a drop from $305 to $300 on average. The same dip in rents will be true for good land with prices going from $260 to $255 per acre; average going from $220 to $210; and fair land from $166 to $160."
The survey also noted that 70% of all farmland buyers were farmers, 15% were local investors, 8% were non-local investors with 6% institutions (school districts, local governments) and 1% other.