(Boone, IA, August 29, 2018) – Prices paid for Illinois farmland continued the “slightly lower” trend according to the Mid-Year Snapshot Survey completed by the Illinois Society of Farm Managers and Rural Appraisers. The survey results were released at the 2018 Farm Progress Show.
“In the first half of the year the value of Excellent quality farmland is down two percent and Average quality land is down one percent ,” says David Klein, AFM, ALC, Soy Capital Ag Services, Bloomington, IL., and overall chair of the Farmland Values program sponsored by the Society. “According to our member survey, prices being paid for Good and Fair quality land prices are very similar from the beginning of the year.”
Klein notes that the survey results indicated the state-wide average price for Excellent quality land by mid-year dropped roughly $200 per acre to $10,522 from the beginning of 2018. Survey results indicated prices for other land classes were estimated to be down less than $100 per acre respectively.
“Our survey somewhat confirms the survey from the Federal Reserve Bank of Chicago released earlier this month, which showed prices level to lightly higher in the first half of 2018, and is an indication of both the somewhat level nature of prices paid, and regional bias of each group’s respondents”, says Klein. “Location and local ownership continues to be a major factor in the strength or weakness of many areas”.
This is happening when fewer acres are changing hands, and majority of respondents expect that to remain the case into the last half of 2018.
Cash Rents to Nudge Lower
University of Illinois’ Gary Schnitkey, Ph.D. who coordinates the survey, indicated respondents expect cash rents to also trend slightly lower, depending on soil classifications.
Excellent — $305 per acre to $290
Good — $265 per acre to $250
Average — $220 per acre to $ 210
Fair — $185 per acre to $175
The type of rental agreements are varied and split into these primary categories:
Share Rent leases – 31 %
Modified Share Rent leases – 13%
Cash Rent leases – 30%
Variable Cash Rent leases – 21%
Custom Farming – 5%
The Mid-Year Snapshot Survey is conducted each year in July as an addenda to the much more comprehensive annual Land Values and Lease Trends Survey, also sponsored by the Society. The results of the year-end 2018 Survey will be released at the 2019 Illinois Land Values Conference which will be held March 21 at the DoubleTree by Hilton in Bloomington, IL.
Note: In the above release, reference is made to different qualities of farmland. In a normal year, Excellent quality farmland averages over 200 bushels of corn per acre with a soil productivity index of 133 or higher, Good quality farmland averages between 170 and 200 bushels per acre with a soil productivity index of 117-132, Average quality farmland averages between 150 and 170 bushels per acre with a soil productivity index of 100-116 and no irrigation, and Fair quality farmland averages below 150 bushels per acre with a soil productivity index under 100 without irrigation.
David Klein, General Chair
Vice President & Managing Broker
Soy Capital Ag Services
6 Heartland Drive
Bloomington, IL 61704
Gary Schnitkey, Ph.D.
University of Illinois
300a Mumford Hall
1301 West Gregory Drive
Urbana, IL 61801