Illinois Farmland Values Continue Upward Trend

The Society conducts a survey half way through the year to evaluate trends in farmland prices and cash rents.

Published on: Aug 30, 2012
e. Custom farming (decrease - 4 percent, the same - 96 percent).

10. The average supplemental rent on a share rent is $25 per acre.

Drought Impacts
11. Respondents indicated that 2012 corn yields will be 44 percent lower than expected. Soybean yields in 2012 will be 30 percent lower than expected.

12. Respondents indicated that few 2012 cash rents will be reduced as a result of the drought. Sixty-six percent of respondents indicated that no rents will be reduced while 34 percent of respondents indicated that cash rents will be reduced on less than 25 percent of their farms.

13. The most popular crop insurance product is Revenue Protection (RP). RP accounted for 76 percent of the insured acres. This was following by RP with the harvest price exclusion with 17 percent of acres. Group Risk Income Plan had 5 percent of the acres, followed by Yield Protection with 2 percent of the acres.

14. Coverage levels on RP polices were:

a. 60% or lower coverage levels: 1 percent of acres,

b. 65% coverage level: 3 percent,

c. 70% coverage level: 15 percent,

d. 75% coverage level: 24 percent,

e. 80% coverage level 35 percent, and

f. 85% coverage level: 22 percent.

15. Seventy-five percent of respondents believe that the drought will have no impact on farmland prices. Fifteen percent expected prices to decrease as a result of the drought and 10 percent expected farmland prices to rise.

16. Seventy-seven percent of respondents expect the drought to have no impact on 2013 cash rents. Twelve percent expect 2013 rents to decrease and 11 percent expect 2013 cash rents to decrease

17. Overall, respondents' expect the 2012 drought to have limited impacts on farmland prices and cash rents.

Miscellaneous
18. The average charge for on-farm grain bin storage is $.14 per bushel.

19. The average charge for pasture is $40 per acre.

20. Respondents were asked an open ended question on what are the most important factors influencing farmland prices over the next 12 months. The most common answers are grain prices and interest rates. Other responses included politics and the 2012 election, legislation (Farm Bill, tax policies), returns on alternative investments, crop expenses, investor demand, and local yields this and next year.