WARRENVILLE, Ill. — Overall, land values for southern and central Illinois farms in the annual Farm Credit Illinois survey are down 4.17 percent this year from last, but prices for Class A lands in central Illinois have stabilized.
The Farm Credit Illinois appraisal team evaluates the same 20 benchmark farms to discover farmland value trends in its 60-county territory in southern and central Illinois, said Kent Reid, Farm Credit Illinois chief appraiser. Some of the farms surveyed have been part of annual benchmarks since the 1970s and provide historical information, he said.
There had been a run up in land values, with a high in July 2014. From 2015 to 2017, there has been a gradual decline each year, Reid said.
But the better farmland in the survey stabilized this year. One Class A farm in Morgan County even went up 6 percent, he said. The Class B farms matched the average of a 4.17 percent drop, but some of the southern farms dropped by almost 7 percent.
When the market value of land went up in 2009, the land in the northern and central part of Farm Credit Illinois’ territory were the first to go up and the southern land followed. When land values went down in 2015-16, the northern and central went down first.
“Now the southern farms have caught up,” Reid said.
Land prices are usually affected by interest rates, grain prices and forecasts, but sometimes how they move doesn’t make sense in relationship with those factors, he said. That may be the case in some areas where little land was sold. Pent-up demand makes prices higher than the market would indicate.
The study showed that cash rent went down slightly. In some cases it went down 5 percent from 2016.
“We look for that to continue,” Reid said.