Illinois Farmland Prices Soar, Defying Expectations
March 26, 2024the value of Illinois farmland continues to climb, marking the fourth consecutive year of increase despite predictions of a plateau. The Illinois Society of Professional Farm Managers and Rural Appraisers released their 2024 Illinois Farmland Values Lease Trends Report on March 21, revealing that all classes of farmland in the state have seen an uptick in value in 2023.
According to Luke Worrell, Chairman of the Illinois Land Values Conference, there was anticipation for a stabilization or softening in prices. However, Class A land values surged by more than 50% over the past three years, with excellent quality land fetching an average of $16,779 per acre in 2023, up 5.5% from the previous year. The report detailed increases across all land qualities, with good quality land averaging $12,911 (up 7%), average quality at $9,198 (up 13%), fair quality at $7,000 (up 14%), and recreational land at $5,250 (up 7%). Transitional land saw the most significant jump, with a 22% increase to an average of $35,000 per acre.
While land values experienced an overall boost, regional variations were noted, and the number of sales saw a decline, with some regions reporting 15% to 30% fewer transactions than the previous year. Estate sales dominated the market, comprising 59% of transactions, followed by sales from farmers, individuals, and institutions.
The majority of buyers were farmers, making up 59% of the purchases, with individual investors and institutions following. Despite the positive trend for landowners, the increasing land prices pose challenges for young and beginning farmers, intensifying entry barriers. However, cash rent rates showed a slight decrease, offering a glimmer of hope with an average of $400 per acre for 2024, down from $412 in 2023.
