Illinois farmland values continue to remain at stable levels, according to the report issued today at a special Illinois Land Values Webinar sponsored by the Illinois Society of Professional Farm Managers and Rural Appraisers (ISPFMRA). The webinar was held in lieu of the annual Conference which was cancelled.
“Farmland remains a stable, safe investment in volatile times such as we’ve seen so recently” was the message from David Klein, AFM, ALC, vice president with First Mid Ag Services, Bloomington. Klein serves as chair of the 2020 Illinois Farmland Values Survey and Conference. “Our survey data show the farmland price trends in the state continue to exhibit a stable pattern with little deviation from a year ago,” he says.
“In our year-end survey we capture the sentiment of what appraisers and farmland real estate brokers believe they are seeing,” Klein continues. “Dr. Gary Schnitkey, at the University of Illinois, polled their observations and outlook in our annual survey the second week of February. ISPFMRA and RLI (Realtors Land Institute) members monitor the pulse of the Illinois farmland market every day and the information in our Report suggests is there is significant variation between certain local areas within each region of the Illinois farmland market right now. The general opinion of our membership’s survey showed characteristics of a market that remains stable.
“2019 will be a year most farmers will never forget,” Klein states. “Crop planting challenges across the state left the most unplanted acres since the spring of 1974. Most farm incomes were protected by crop insurance proceeds and USDA market facilitation payments.
“As we begin, 2020 farmland values seem be holding firm as farmland owners and investors continue to seek the safety and security of this tightly-held asset class with its unique investment characteristics in Illinois and other Midwestern states. Individual micro-markets of strength and weakness do exist, and this can create opportunities for sellers and buyers. You will notice variations within regions and different local markets for similar quality land. Location continues to be an important variable,” he notes.
Excellent-quality farmland in northern Illinois ranged from $9,750 to 10,500 per acre, down 3%, by the end of the year. Rents for that area ranged from $270 to 320 per acre, steady with a year earlier. In central Illinois, excellent-quality ground ranged from $10,500 to $11,000 per acre, up 1%. Rents ranged from $300 to $350 per acre, steady to slightly higher than 2918. In southern Illinois, prices in the metro-east area of St. Louis averaged about $12,000 and acre with rents ranging from $225 to $350 an acre.
The central belt of the state seems to have the most consistent position of a stable-to-slightly-higher farmland market, Klein notes. Characteristics of farm sales in the data set for 2019 were slightly smaller in size and higher in quality, as compared to 2018. Challenges exist especially in the northeastern part of the state and lower quality soils in Southern Illinois.
For the state as a whole, excellent-quality farmland averages $10,500 an acre, unchanged from a year earlier; good-quality ground averages $8,600 an acre, down 1%; average-quality farmland is $6,700 an acre, down 3% from a year earlier; and fair-quality farmland is $5,200 an acre, down 2% from 2018.