Survey dissects farmland sales, price outlook

BLOOMINGTON, Ill. — Expectations a year ago that farmland prices have plateaued became reality through 2024 — and farm managers and rural appraisers expect more of the same this year.

Farmland prices, sellers and buyers of farmland, corn prices and other topics were covered in the Illinois Society of Professional Farm Managers and Rural Appraisers’ annual farmland values and lease trends survey.

“This isn’t just the opinion of a few people around the table. This is a project that has over 70 professionals involved. This is all-encompassing. This is accurate data that a lot of people spent a lot of time on,” said Luke Worrell of Worrell Land Services, Jacksonville, and overall survey and Land Values Conference chair.

Most respondents expect farmland prices to remain the same or decline in 2025, with only 5% expecting farmland prices to increase.

In total, 31% of the respondents expect farmland prices to remain the same, while 64% expect prices to decline.

Almost half of the respondents, at 49%, expect a decline of less than 5%, whereas 13% expect a decline between 5% and 10%. Only 2% of the respondents expect a decline of over 10%.

“The 2025 outlook is remarkably similar to that at the beginning of 2024,” said Gary Schnitkey, University of Illinois agricultural economist and survey head.

“The percentage for decreases in 2024 and 2025 are the same at 64%. More than 50% of past respondents expected declines from 2015 to 2019, a period in which farmland prices remained relatively stable, with price declines in some years.

“The percentage of respondents expecting declines then decreased from 2020 through 2022, reaching a low of 3% in 2022. Corresponding to the low percentage of participants expecting price declines, farmland prices increased dramatically in the early 2020s.

“In 2024 and 2025, percentage of respondents who expect price declines is on the rise again, reaching similar levels to those in 2018 and 2019.”

Factors

Survey respondents were asked questions regarding their expectations of the underlying factors impacting farmland prices.

• Agricultural economy — Of those surveyed, 93% expect the agricultural economy to contract modestly, nearly the same as expectations a year ago.

• Interest rates — Half of those surveyed expect interest rates to remain the same in 2025, while 43% expect interest rates to decline.

• Corn prices — 60% expect corn prices to be less than $4.50 per bushel; 38% expect prices between $4.50 and $5.50 per bushel and 2% anticipate prices to be above $5.50.

• Costs — Most respondents, at 53%, expect costs to remain the same in 2025, while 36% expect declines and 21% expect increases.

Farmland Sellers

Estate sales accounted for 59% of farmland sales in 2024, followed by retired farmers, 13%; individual investors, 12%; institutions, 9%; active farmers, 6%; and other, 1%.

Survey respondents were also asked to identify reasons why farmland was sold.

The major reason for selling farmland was to settle estates, accounting for 57%. Other reasons were reinvest in other ag enterprises, 13%; use for other personal purposes, 13%; invest in nonagricultural assets, 12%; and pay down debt, 5%.

Public auction continued to be the leading method of selling farmland — 53%. Other methods were private treaties, 27%; multi-parcel auction, 17%; and sealed bid, 3%.

Farmland Buyers

Farmers accounted for 59% of the buyers, with 57% being local farmers and 2% being farmers relocating to a new area.

Individual investors who would not farm the land were the next largest group, accounting for 30% of the buyers. Local investors accounted for 17% of the buyers, 13% were nonlocal investors and institutions were 6% of the buyers.

Survey respondents estimated that 56% of land purchases required some form of debt financing. Of those financing the debt, the amount of debt financial averaged 54% of the purchase price.

Volume Of Sales

Of the respondents, 60% indicated that the volume of sales decreased in the last half of 2024 compared to the last half of 2023.

Overall, survey respondents are expecting farmland values to remain stable in 2025, with the possibility of slight price declines.

The primary factor behind this expectation is the anticipated decline in corn and soybean prices. Unfortunately, these price declines are not being offset by similar declines in costs, the survey concluded.