It looks like farmland values may drop a bit of altitude in 2014.
Going into 2014, most experts were using the word "soften" to describe the market. "Downturn" has yet to enter their vocabulary. Bruce Huber, senior vice president at Hickory Point Bank, explains why.
Speaking in December, Huber says sale prices were varying quite a bit in central Illinois. One parcel near Cerro Gordo sold for $13,700/acre, which is in line with last year. Another, near Argenta, brought only $11,000, which Huber estimates was off by about 10% compared to last year's market.
"In this market, it really depends on where your farm is," Huber says.
In other words, if it's quality ground surrounded by fierce competition, sellers can expect top dollar. On the other hand, prices appear to be softer on less than top-notch land.
"If your farm is up for sale with strong interest from neighboring farmers, you'll do just fine," he adds. "Farmers are being pickier. Almost all of the big sales I've seen have been prime land."
For example, Huber cites numerous sales around Macon County with slight drainage issues that fetched somewhere in the mid-$11,000 range. That's about 10% less than he would have expected last year.
Another change from last year, farms that fetch ludicrous prices are becoming a rarity.
"Last year, you'd hear about a blowout sale every week," Huber says. "You're not hearing that now."
Huber cites a Moultrie County sale that brought $16,400/acre. Shortly thereafter, a Christian County sale brought only $10,000/acre, much less than he expected.
"These sales are really swinging around," he notes.