Prices being paid for farmland across Illinois softened in the first half of 2024 and respondents to a survey by the Illinois Society of Professional Farm Managers and Rural appraisers indicate they expect the trend to continue for the balance of the year. This is according to a mid-year ‘snapshot’ survey done among Society members with the results being announced today at the Farm Progress Show.
The survey, conducted by Dr. Gary Schnitkey, University of Illinois, during the mid two weeks of August, indicate lower commodity prices are the drivers behind the price declines. He reports that respondents expect sales of the 2024 crop to average $3.85 per bu. for corn and $10.00 per bu. for soybeans. Survey participants expect continued lower prices for commodities for 2024 production compared to 2021, 2022, and 2023.
“Excellent and good-quality farmland experienced a 5% decline. Average and fair-quality farmland saw higher declines of 8% and 10%, respectively,” says Luke Worrell, AFM, ALC, Worrell Land Services, Jacksonville, IL, overall chair of the Society’s Land Values and Lease Trends Report committee. He explains the ‘snapshot’ survey supplements the Society’s more extensive year-end efforts which are reported annually at the Illinois Land Values Conference held in March.
Worrell notes “a smaller percentage of farmland transactions occurred through estate sales, with the other groups increasing.” He explains that of sales in the first half of the year, 50% were estate sales, 16% were farmers and 15% were local investors. “Farmers are still the predominant buyers making up 63% of that category. This was followed by 16% being local investors, 11% non-local investors and 9% were institutions.”
He also notes more transactions are being done through listings rather than auctions and “55% expect more listings while 31% expect listings and auctions to be about the same. A minority, 14%, expect more auctions.”
Most survey respondents expect declines in farmland prices during the second half of 2024. Compared to the 2023 survey, respondents are more pessimistic about farmland prices: 89% expect price declines, while 11% expect farmland prices to remain the same. Responses to specific categories are:
- 47% expect declines of more than 3%;
- 42% expect declines less than 3%;
- 11% expect farmland prices to be constant
Lower Cash Rents, too
Cash rents are expected to decline in 2025, Worrell reports. The average decline across farm managers and land qualities is about $25 per acre. “Cash rents increased from 2000 to 2023, remained stable in 2024, and are now likely to decrease into 2025.
Over time, Society members have slowly increased their use of variable cash rental arrangements, so that 35% of the leases are now variable cash agreements. That increase is expected to continue.”