The price of farmland across the state of Illinois increased only slightly in the first half of 2010 according to a mid-year 'snapshot' survey by the Illinois Society of Professional Farm Managers and Rural Appraisers. The results of the survey were released last week at the Farm Progress Show.
ISPFMRA conducts a survey half way through the year to obtain general directions on farmland prices and cash rents. This information supplements the Society's larger efforts at year-end to document farmland prices and cash rents across Illinois. The 2010 mid-year survey also focused on use of variable cash rental arrangements to gain information on this lease type that is growing in use.
Below are the key points from the survey. Please note:
- Excellent = 190 bushels
- Good = 190-170 bushels
- Average = 170-150 bushels
- Fair = below 150 bushels
Farmland Prices
1. Respondents indicated that higher quality land values increased slightly during the first half of 2010. For excellent quality farmland, land prices increased by $131 per acre, or a 1.7% increase. For fair quality farmland, respondents indicated that land values were stable.
2. On July 1, 2010, farmland prices averaged $7,665 for excellent quality farmland, $6,639 for good quality farmland, $5,724 for average quality farmland, and $4,646 for fair quality farmland.
3. Volume of sales was less during the first half of 2010 compared to the first half of 2009. Sixty-five percent of respondents indicated that the volume of sales was less than during the first half of 2009.
4. Most respondents expect farmland prices to increase during the next 12 months: 16% expect farmland prices to increase over 5% and 64% expect increases between 0 and 5%, meaning that 69% expect price increases.
5. Most respondents expect corn prices to average between $3.50 and $4.00 for the 2010 crop.
2011 Cash Rents
6. Respondents expect 2011 rents to average slightly higher than 2010 levels:
a. Excellent quality farmland: Respondents indicated that average cash rent in 2010 was $272 per acre and expect 2011 rents to average $279 per acre, a $7 per acre increase.
b. Good quality farmland: Respondents indicated that average cash rent in 2009 was $230 per acre and expect 2011 rents to average $237 per acre, a $7 per acre increase.
c. Average quality farmland: Respondents indicated that average cash rent in 2009 was $193 per acre and expect 2011 rents to average $199 per acre, a $6 per acre increase.
d. Fair quality farmland: Respondents indicated that average cash rent in 2009 was $157 per acre and expect 2011 rents to average $162 per acre, a $5 per acre increase.
7. Most respondents expect production costs to increase slightly in 2011 over 1010 levels. Of the respondents, 3% expect production costs to increase a great deal, 72% expect costs to increase slightly, and 25% expect costs to remain the same. None of the respondents expect costs to decline.
Leasing Arrangements
8. For 2010, survey respondents indicate that the following leasing arrangements were used as a percent of rented acres:
a. Share rent – 25%,
b. Share rent with modifications –18%,
c. Fixed cash rent – 33%,
d. Variable cash rent – 16%,
e. Custom farming – 8%.
The larger, annual Land Values and Lease Trends survey done by ISPFMRA will be conducted at the end of this year. The results of that survey will be announced at the 2011 Illinois Land Values Conference which will be held March 15, 16 in Bloomington.