Illinois farmland prices remain steady

BLOOMINGTON, Ill. — Prairie State-wide data found slight increases in farmland values across most soil types in 2020.

The Illinois Society of Professional Farm Managers and Rural Appraisers released the findings of its comprehensive data at the annual Farmland Values Survey and Conference March 18 via virtual platform.

“Average sale prices of completed sales across the state remained stable,” said Luke Worrell, Worrell Land Services, Jacksonville, overall chair of conference.

Excellent category land averaged $10,870 per acre in 2020 compared to $10,435 in 2019. Good category land was $8,446 compared to $8,335 in 2019.

Average was $6,409 compared to $6,502 in 2019; fair was $5,353 compared to $5,090; and recreation land was $3,689 compared to $3,904.

“There is value and there are good investments across every land classification.”

—  Luke Worrell, Worrell Land Services

Excellent-rated land has a productivity index of 133 and above; good-rated land’s PI is 117 to 132; average, 100 to 116; and fair, less than 100.

“Statewide data suggests we witnessed mild increases in values for excellent, good and fair soil types. A stable, yet slightly decreased, value was experienced amongst average soil types,” Worrell said. “The largest increase was in Class A farms as high-quality farmland continues to carry the flag across the state.”

“These are statewide averages. One would need to look through the entire report to see the region-by-region statistics,” he added.

Worrell is optimistic about what lies ahead for farmland values and agriculture.

“We really ended 2020 on the upswing. In many ways that last quarter of 2020 has set the table for what will likely be a higher rise in values in 2021. I’ll stop short of saying that’s definitely going to happen because a few things pop up from time to time that none of us were expecting. But I think the tables are set for an incredibly interesting 2021 and I suspect our findings next year will be a little more dramatic than maybe what we have seen in the last handful of years,” he said.

“There are still strong investments, still very attractive purchases from land buyers throughout every classification, not just the Class A land. There is value and there are good investments across every land classification.

“I’m very thankful that we in ag weathered the storm significantly better than almost any other sector of the economy.”

Worrell then cited three economic occurrences that played a role in the state of agriculture:

• COVID-19 — Worrell noted that the bulk of land sales traditionally take place from October through March. “The virus and its impacts hit right when the market typically slows on volume of transactions anyway. By the time late September and October rolled around, commodity prices were on the rise and we had somewhat acclimated to our pandemic surroundings,” he said.

• Low Interest Rates — Worrell noted that interest rates continued to be incredibly low, allowing borrowers to be more aggressive than they normally would in acquisitions. This dynamic continues to be extremely supportive to land values.

• Government Policy — “An enormous amount of money was paid out through various government programs in 2020. By the time commodities showed strength late in 2020, many operations had already been substantially buoyed by lingering Market Facilitation Program payments that came in during the first quarter, in addition to Coronavirus Food Assistance Program and CFAP 2 payments. The recent transition to the Biden administration will be closely observed as it deals with tariffs, trade and other issues that need clarity. It is a global economy in which the development and/or resolution of issues in Asia, Europe, Africa and South America affects all of us here in Illinois,” Worrell said.

Around The State

Here are some of the survey findings by regions:

Region 1 — Will, Kankakee, Kendall, Kane, DeKalb, Grundy, McHenry, Lake, DuPage, La Salle and Boone counties: Excellent quality farmland sales averaged $10,153 per acre, good land sales averaged $8,207 per acre, average farmland was $6,192 per acre, there was only limited data for fair productivity tracts, and recreational tracts averaged $4,416 per acre.

There seemed to be an ample supply of Class A farms and a stable environment throughout all land sectors.

Region 2 — Bureau, Carroll, Stephenson, Jo Daviess, Whiteside, Lee, Ogle, Winnebago, Bureau, Henry and Mercer counties: The average acre weighted price for excellent quality farmland sales was $10,388 per acre, good land sales averaged $8,202 per acre, average farmland was $5,630 per acre, average quality farmland was $5,630 per acre, fair was $4,855 per acre, and recreational tracts averaged $4,416 per acre weighted.

A stable environment was noted on the upper end farms and this one of the few regions that showed increases in “recreational land” values.

Region 3 — Stark, Peoria, Warren, Henderson, Schuyler, Adams, Hancock, Brown, Pike, McDonough, Knox and Fulton counties: The overall average sale price for excellent farmland was $11,929 per acre, good quality land averaged $7,030, average land was $4,899, the four sales of fair land in 2020 averaged $4,496, and recreational averaged $3,511.

There were a reduced number of sales in the Class A sector, which made for one of the state’s largest jumps with excellent productivity farmland up 10% to 12% over 2019 numbers.

Region 4 — Livingston, Woodford, McLean, Tazewell, Mason, Marshall and Putnam counties: High productivity farmland sales averaged $11,024 per acre, good rated land $8,794, average farmland $6,006, four tracts of fair averaged $6,811, recreational $4,123 per acre.

The region is home to some of the Illinois’ best soil and the spring onset of COVID had some already-scheduled auctions scrambling for new formats.

The presence of wind energy and subsequent payments add a unique twist to many farms in the area.

The top class of farms saw a 5% increase in average price from the previous year while the remainder of classes held firm.

Region 5 — Champaign, Douglas, Coles, Edgar, Vermilion, Iroquois and Ford counties: Excellent farmland sales averaged $10,421 per acre, good quality $7,992, average farmland $6,103, two sales of fair farmland averaged $6,722, and recreational averaged $4,340 per acre weighted.

This was one of the few regions that showed a large increase in the number of transactions from 2019 to 2020.

All sale price movements to either the positive or negative were marginal in the region.

Land is being leased for a large solar farm to be constructed in northeastern Coles County. A solar farm is under construction in the eastern part of the county and encompasses about 1,600 acres.

Region 6 — Macon, Logan, DeWitt, Piatt, Moultrie, Shelby and Christian counties: The sales for excellent farmland averaged $10,904 per acre, good quality $9,425, average farmland $7,050, fair $5,996, and recreational $3,920 per acre.

This region’s committee noted a continued presence of institution investors and saw a larger jump in good and average farms than in the excellent category.

There was a 10% increase in recreational land values in 2019, and 2020 data showed a 10% decrease.

Region 7 — Greene, Calhoun, Sangamon, Macoupin, Morgan, Scott, Montgomery, Cass and Jersey counties: The average acre weighed sales for excellent quality farmland was $11,760, good productivity $9,477, average $6,792, fair $3,483, and recreational tracts $3,252 per acre.

This traditionally is one of the strongest regions for values and ended 2020 showing values up 4% to 7% across the top three classifications.

The rate of turnover remained steady across all sectors.

There are some existing solar farms located south of Jacksonville, near Woodson.

A wind farm project received final approval to be constructed east of Jacksonville near the Morgan and Sangamon County line. It has a significant footprint in that area.

Region 8 — Madison, Bond, St. Clair, Clinton, Washington, Monroe and Randolph counties: Excellent quality per acre farmland sales averaged $11,188 acre weighted, good productivity was $11.240, average quality $9,126, fair $6,487, and recreational tracts averaged $3,833 per acre weighed.

The region saw strength in the housing market and transitional land, one of the few regions to have seen this in 2020.

There was an increase in the number of transactions with only recreational sales showing a decrease in both frequency and value.

Region 9 — Clark, Cumberland, Lawrence, Wabash, Edwards, Fayette, Effingham, Richland, Marion, Jasper, Crawford, Wayne and Clay counties: There were no sales in the excellent productivity land in this region in 2020. Good productivity farmland sales per acre averaged $8,296 acre weighted, average productivity $6,997, fair $4,860, and recreational tracts averaged $3,445 per acre.

Farmland values and turnover was virtually unchanged from the previous year.

Region 10 — Gallatin, Hamilton, Massac, Pulaski, Saline, White, Alexander, Franklin, Jackson, Jefferson, Williamson, Union, Johnson, Hardin, Perry and Pope counties: The sales of four parcels of good quality farmland averaged $9,304 acre weighted.

The region is divided into two subdivisions of average productivity cropland. The sales of average quality farmland in Area 1, with a 109.3 average productivity index, was $7,568 acre weighted, and $5,852 per acre in Area 2, with a 107.6 PI average. The sales of fair productivity tracts averaged $4,222 and recreational tracts $2,479 per acre.

The region saw increases for all tillable acreage including a 10% increase in fair quality farmland. There was a decrease in both the number of transactions and land values for recreational land.