Are you graduating from a community college and transferring to one of the four in-state agriculture universities (Illinois State, Southern Illinois, University of Illinois, or Western Illinois) to pursue a bachelor of science degree in agriculture? Are you interested in a career in farm management, rural appraisal, or rural consulting? Apply for our ISPFMRA scholarship for community college transfer students!
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Our Fall 2018 newsletter is available now. Click the link to download it
(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.
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.
Contacts
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
(Bloomington, IL, March 22) Prices being paid for high quality Illinois farmland, as well as cash rents have stayed essentially flat for the past 12 months according to the 2018 Illinois Farmland Values and Lease Trends Report released today by the Illinois Society of Professional Farm Managers and Rural Appraisers at the Illinois Land Values Conference held here. The Report is based on an annual survey of the Society’s members and others allied to the industry and reflects activity from 2017.
“The news is there is isn’t much new regarding land values or changes in rents being paid for farmland,” says David Klein, AFM, ALC, with Soy Capital Ag Services and overall chair of the annual Land Values project sponsored by the Society. “Prices paid for Excellent quality farmland across the northern part of the state were down 1-2 percent with ranges from $10,500 to $11,000 per acre across the various regions of the state. That same type of land in the central part of the state was going at $10,350 to $11,400 per acre in the past year. This was flat-to-down 5 percent in certain areas.
“In the southern regions of the state there was really no movement at all in terms of drops or increases in prices for land. It was going from $8,000 to $10,885 per acre in the same areas as it was a year ago,” he explained.
A similar trend was true of cash rents being paid for the same Excellent quality farmland. “Projected rents remained relatively steady all across the state,” he said. Rent prices ranged from $295 to $325 per acre in the northern part of the state; $300 to $350 per acre for the central region, and; $160 to $325 in the southern counties.
Klein notes the statewide average prices being paid for Excellent farmland have dropped from their peak of approximately $12,500 per acre in 2013. “Comparatively, though, the average price paid for this same farmland in 2002, 15 years ago, was a little over $3,400 per acre,” he noted.
Klein says the profile of the buyers of farmland has not changed in many years with farmers accounting for 62 percent of that group. “They know the value as well as, if not better than, anyone else and they are reinvesting into their own farm businesses. Investors, local and otherwise, are the second largest group of buyers accounting for 23 percent of the sales.
“Estate sales still lead the way as the greatest reason for a property to come on the market,” he explains. Private treaty is still the most popular way of selling land (49 percent) followed by public auction (35 percent). “It’s interesting to note how little this changes with time,” Klein adds. “In 2003 our report indicated that private treaty accounted for 50 percent of sales and public auction was at 32 percent.” As with rent rates, prices being paid for the land are based primarily on commodity prices. “It’s one of the ironies of agriculture – often the higher the soil productivity, the lower the cash return. But this also often carries with it lower risk, and improved asset price stability,” he says. “Our surveyed members believe the primary factor that could cause a drop in farmland prices of more than 5 percent would be falling commodity prices because of good growing condition in the United States.” He notes, however, that an increase in interest rates could also impact demand, and cause prices to drop. “Keep an eye on grain prices, interest rates, and governmental policy changes over the next 12-24 months for further direction in where the farmland market may be headed. What feels like a market that should be getting softer, may not happen because of general economic reasons. Conversely, there may be some real opportunities for investors to purchase productive land that could use some improvements during moments of uncertainty.” Klein says.
For Excellent quality farmland, traditional crop shares had average income of $193 per acre, cash rent had $230 per acre, and custom farming had $253 per acre, says Dr. Gary Schnitkey, University of Illinois Department of Ag and Consumer Economics. Across all productivities, a straight crop share lease had the lowest returns. Cash rent and custom farming had returns near one another for the Good, Average, and Fair land classes.
There is a great deal of variability in cash rents for a given land productivity, he notes. “For example, the average cash rent for the mid 1/3 group on Excellent quality farmland is $298 per acre. The high 1/3 of leases averaged $317 per acre, $19 higher than the mid 1/3 group. Similarly, the low 1/3 group averaged $258 per acre, $40 lower than the mid 1/3 group. From the high 1/3 group to the low 1/3 group, there is a $59 per acre difference in average rents for Excellent productivity farmland. Similar ranges exist across Good ($53 from the high 1/3 to low 1/3 averages), Average ($49 per acre), and Fair ($50 per acre) productivity classes.
“Fifty-eight percent of respondents expected 2019 cash rents to remain the same as 2018 cash rents,” he explains.
The complete 2018 Illinois Land Values and Lease Trends Report is available for purchase in hard copy. The 124-page document includes region-by-region farmland sales data and also features year-over-year trend lines with numbers of properties sold, sales prices and median sales price data.
The ISPFMRA is one of 37 chapters of the American Society of Farm Managers and Rural Appraisers. The Illinois chapter, now celebrating its 90th year, is the oldest and largest state organization of its kind in the United States. Members are professionals devoted to the management and appraisal of rural property and agricultural consulting.
Join your colleagues for a very full day and a-half of touring, learning, gabbing and just plain having a good time in the Decatur/Assumption/Pano area on August 9-10. You can register and pay online using the form at the bottom of this page. Or you can print the PDF version of our agenda and registration form and mail us a check.
Thursday, August 9
(All tour activities will begin and end at the Decatur Conference Center, 4191 US Hwy 36 West, Decatur, IL)
• Ingram’s Soil Testing Lab, Sullivan, IL
Ingram’s Soil Testing Center has been providing quality soil sampling and testing services to clients in Illinois, Indiana, Michigan and Missouri since 1979. Their services include taking GPS soil samples, testing soil for nutrients, creating field map books and fertilizer spread maps. Introduction of the Global Positioning System during the early 1990’s allowed to ISTC to expand the business to include quality GPS soil sampling services. The company added a second sampling and testing location in Athens, in 1996.
• DIGS Associates, Moweaqua, IL.
These are THE drainage specialist across Illinois and will be providing an up-close look at:
• Drainage History – Then and Now • Drainage Law – What’s Legal
• Drainage Materials – Evolution of Tile • Drainage Equipment – Techniques and Methods
• Comprehensive Watershed Drainage Analysis • Working with Neighbors – Mutual Mains
Lunch, courtesy of DIGS Associates, will be served at their facility.
• GSI Grain Handling Equipment Manufacturing, Assumption
This is an encore tour for the Illinois Society having been here over 10 years ago! GSI grew from a small, l;ocal provider of
corrugated steel storage bins in 1972. Today it is the world’s largest manufacturer of steel farm bins, commercial storage grain bins and grain silos providing equipment and services to customer in over 70 compines worldwide.
• Sloan’s & Sloan’s Express, Assumption, IL.
No matter what the ag product or its color, Sloan Express rightfully calls itself America’s Ag Parts Supplier. Selling directly to farmers, implement dealers and repair shops, its catalog has over 75,000 items. Orders in by 2 p.m. ship the same date with guaranteed next-day delivery anywhere in Illinois. Could this be Ag’s version of Amazon?
• Arpeggio Winery, Pano, IL.
Arpeggion wines are wines with rhythm — Beginning in 2008, the Swiney Family planted a two-acre vineyard consisting of two varieties, Norton and Traminette. Their journey from grapes to wine has led them to the restoration of their centuryold barn called Arpeggio Winery. All of the wines are named after musical terms. Tonight you can sample some of their wines and relax to a specially-catered dinner.
Friday, August 10
• Marketing with ADM
Breakfast with guest speaker — A plated breakfast will be served following by a presentation from Sam Elmore, a merchandiser with ADM. He will review his role in buying whole trains, getting them loaded and shipped across the U.S.
• ADM’s Railyard — A behind-the-scenes tour
The group will travel by motor coach (no private vehicles allowed) to the ADM railyard and intermodal yard with a presentation on the day-to-day management of the facility including plant switching, rail car storage and contractor relations. Your host will be Gary Davis, senior operations manager ADM Rail.
ISPFMRA Summer 2018 Tour Committee: Roger Leach, AFM, AAC, CCA; Keith Waterman, AFM, ALC; Max Hendrickson; and Brady Evans and Brad Davis, both with U.S. Bank Farm Management.
Daniel Legner, ARA, (left, front) heads up the 2018 leadership team of the Illinois Society of Professional Farm Managers and Rural Appraisers. He and the other officers were elected during the organization’s Annual Meeting held February 8 in Champaign, IL. Other members of the team are, right, from Legner: Rob Woodrow, AFM, president-elect, Farmland Solutions, LLC, Sherman, IL; Gary Schnitkey, Ph.D., secretary/treasurer, University of Illinois, Champaign. In the second row are, from left: Maria Boerngen, Ph.D., academic vice president, Illinois State University, Normal, IL; Seth Baker, AFM, vice president, Field Level Agriculture, Mt. Zion, IL, and; Eric Wilkinson, AFM, immediate-past president, Hertz Farm Management, Kankakee, IL. Legner is Senior Certified Appraiser with Compeer Financial (formerly 1st Farm Credit Services) in Princeton, IL. He received his Accredited Rural Appraiser designation from the American Society of Farm Managers and Rural Appraisers in 2005.
Ernest D. (Ernie) Moody, AFM, ARA, AAC, (right) was inducted into the Hall of Fame of the Illinois Society of Professional Farm Managers and Rural Appraisers at the organization’s annual meeting held February 8 in Champaign, IL. Making the presentation is Richard Hiatt, AFM, ARA, immediate past-president of the organization.
Moody is the 49th recipient of the honor which is given to members for their “outstanding service above and beyond.” In addition to serving as the Society’s president in 1996, he has chaired numerous committees and served on more. He is a co-founder of Heartland Ag Group of Springfield. The presentation coincided with the 90th Anniversary celebration of the society which was founded on the University of Illinois campus in 1928.
If you joined us for our 2018 annual conference, thank you! We hope you enjoyed our gathering — and our celebration of the ISPFMRA’s 90th anniversary — as much as we did. Stay tuned to this space for presentations, photos, and more from our conference.
2018 Farm Bill Discussion (Coppess-ISPFMRA Feb 8 2018).pdf
(View the high-quality video file here or right-click and save to download the file.)
Download our PowerPoint presentation for more about the ISPFMRA’s history.
On May 17, 2017, the bylaws amendments that were voted on at the February 16, 2017 annual meeting began to take effect. Some of these will take effect October 1, 2017. To wit:
• The Academic Vice President shall be appointed for a term of three years. The position shall be rotated between
representatives of the University of Illinois, Southern Illinois University, Western Illinois University, and Illinois
State University Regarding Representatives to the ASFMRA Board.
• However, when the Chapter’s representative also serves in a voting capacity by virtue of his/her position on the
ASFMRA Executive Council. the representative shall be required to resign his/her position as the Chapter representative
as a voting delegate, and the named Alternate will then represent the Chapter on the ASFRMA Board of Directors.
• Section 3. Effective Date The effective date for enforcement of any amendment to the bylaws shall be ninety (90) days after the date of adoption, unless otherwise stipulated in the adoption of the amendment.
Now you can download the electronic version of our 2017 Land Values Report! It’s a free download — just right-click the link below and save the PDF to your computer.