Boone, IA, Wednesday, August 28 – Prices being paid for farmland across Illinois softened in the first half of 2024 and respondents to a survey by the Illinois Society of Professional Farm Managers and Rural appraisers indicate they expect the trend to continue for the balance of the year. This is according to a mid-year ‘snapshot’ survey done among Society Members with the results being announced today at the Farm Progress Show being held here.
The survey, conducted by Gary Schnitkey, Ph.D., University of Illinois, during the mid two weeks of August, indicated lower commodity prices are the drivers behind the price declines. He reports that respondents expect sales of the 2024 crop to average $3.85 per bushel for corn and $10.00 per bushel for soybeans. Survey participants expected continued lower prices for commodities for 2024 production compared to 2021, 2022, and 2023.
“Excellent and good-quality farmland experienced a 5 percent decline. Average and fair-quality farmland saw higher declines of 8 percent and 10 percent, respectively,” said Luke Worrell, AFM, ALC, Worrell Land Services, Jacksonville, IL, overall chair of the Society’s Land Values and Lease Trends Report committee. He explained that the ‘snapshot’ survey supplements the Society’s more extensive year-end efforts which are reported annually at the Illinois Land Values Conference. The 2025 event will be held March 27 in Bloomington, IL.
Worrell noted that “a smaller percentage of farmland transactions occurred through estate sales, with the other groups increasing.” He explained that of sales in the first half of the year, 50 percent were estate sales, 16 percent were farmers and 15 percent were local investors. “Farmers are still the predominant buyers making up 63 percent of that category. This was followed by 16 percent being local investors, 11 percent non-local investors and 9 percent were institutions.”
He also noted that more transactions are being done through listings rather than auctions and “55 percent expect more listings while 31 percent expect listings and auctions to be about the same. A minority of 14 percent expect more auctions.”
Most survey respondents expect declines in farmland prices during the second half of 2024. Compared to the 2023 survey, respondents are more pessimistic about farmland prices: 89 percent expect price declines, while 11 percent expect farmland prices to remain the same. Responses to specific categories are:
– 47 percent expect declines of more than 3 percent
– 42 percent expect declines less than 3 percent
– 11 percent expect farmland prices to be constant
Lower Cash Rents, too
Cash rents are expected to decline in 2025, Worrell reported. The average decline across farm managers and land qualities is about $25 per acre. “Cash rents increased from 2000 to 2023, remained stable in 2024, and are now likely to decrease into 2025.
Over time, Society members have slowly increased their use of variable cash rental arrangements, so that 35 percent of the leases are now variable cash agreements. That increase is expected to continue.”
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Respondents indicate the following use of alternative leases:
– 25 percent are share rent leases
– 9 percent are modified share rent leases
– 25 percent are cash rent leases
– 35 percent are variable cash rent leases
– 7 percent are custom farming
Over time, variable cash rents have increased, and share rent leases have declined. Worrell says farm managers continue to see stability in farm lease type use going into 2025, but with a continuing trend to more variable cash leases and fewer share rent arrangements.