DECATUR - Owners of farmland across Illinois saw a dramatic 20 percent increase in land values in the first half of 2021, only the fourth time there has been this size of positive change in land values since 1970, according to a survey done by the Illinois Society of Professional Farm Managers and Rural Appraisers. The results of the survey were released Sept. 1 at the Farm Progress Show held in Decatur.
Gary Schnitkey, Ph.D., University of Illinois, Champaign, and Luke Worrell, AFM, ALC, Worrell Land Services, Jacksonville, said the price increases occurred across the entire state and affected land from all productivity levels.
The survey was conducted in mid-August among ISPFMRA members and others associated with farmland sales and valuations.
The upward trend in land values is expected to continue with 78 percent predicting increases, although at a more moderate rate, reflecting a tempered outlook over the next five years. There is also an expectation that inflation rates will rise with 49 percent expecting a rise of up to 1 percent while 51 percent feel rates will be stable.
Cash rents will jump, too
Cash rents in 2022 are also expected to increase by as much as 11 percent over rates paid this year. Schnitkey and Worrell said Illinois Society members generally have a base cash rent, with an increase possible if revenue is above a pre-set threshold. The use of this type of variable rental arrangement is expected to grow. The average supplemental rent on a share rent lease is $29 per acre.
Per acre rental rates for excellent productivity is expected to move upward from $315 to $350. Values on good productivity property will move from $279 to $299; average productivity land should go from $226 to $249; with the value paid for fair land to move upward from $188 to $210. Fifty-one percent of survey respondents indicate that farmland values will be 1 to 10 percent higher in five years.
Anticipated prices being paid for each bushel for corn and soybeans for 2022 are $4.86 for corn and $11.52 for soybeans. These prices would be higher than the averages paid from 2014 to 2019, but below the selling price for the 2021 crops.
The mid-year survey is an abbreviated version of the more comprehensive Farmland Values and Lease Trends report that is prepared annually by the Illinois Society. The 2022 survey will be done in January 2022 with the results released at the organization’s annual Illinois Land Values Conference, which is set for March 17 in Bloomington.