Farmland prices in Illinois decline as commodity prices fall

By Andi Anderson

Farmland prices in Illinois have softened in the first half of 2024, and a recent survey by the Illinois Society of Professional Farm Managers and Rural Appraisers indicates that this downward trend is likely to continue for the rest of the year.

The survey results were announced at the Farm Progress Show, providing insights into the current state of the farmland market.

The survey, conducted by Dr. Gary Schnitkey from the University of Illinois, attributes the price declines to lower commodity prices. Respondents expect the 2024 crop sales to average $3.85 per bushel for corn and $10.00 per bushel for soybeans, which are significantly lower than prices seen in previous years.

This expectation of continued lower prices is a key factor driving the decline in farmland values.

According to the survey, excellent and good-quality farmland experienced a 5 percent decline, while average and fair-quality farmland saw larger declines of 8 percent and 10 percent, respectively.

Luke Worrell, the overall chair of the Society’s Land Values and Lease Trends Report committee, explained that this survey provides a mid-year ‘snapshot’ of trends that will be further detailed in the Society’s annual Illinois Land Values Conference scheduled for March 2025.

The survey also highlighted changes in the types of farmland transactions, with a smaller percentage occurring through estate sales. In the first half of the year, 50 percent of sales were estate-related, while farmers accounted for 16 percent and local investors for 15 percent. Farmers remain the predominant buyers, making up 63 percent of all purchases.

Additionally, more farmland transactions are being completed through listings rather than auctions. The survey noted that 55 percent of respondents expect more listings in the future, while only 14 percent anticipate an increase in auctions.

Looking ahead, most survey respondents expect farmland prices to continue declining in the second half of 2024. A significant 89 percent of respondents predict price declines, with 47 percent expecting declines of more than 3 percent and 42 percent expecting smaller declines.

Cash rents are also expected to decrease in 2025, with an average drop of $25 per acre anticipated across various farm managers and land qualities.

While cash rents increased steadily from 2000 to 2023, they remained stable in 2024 and are now likely to decrease. The survey also indicated a continued shift toward variable cash rental arrangements, which now make up 35 percent of leases.

The complete survey details are available on the Illinois Society of Professional Farm Managers and Rural Appraisers' website.

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