The value of Illinois farmland increased in all land categories in 2006, but at a slower pace than recent years, according to the 2007 Illinois Farmland Values and Lease Trends report.
The study showed Illinois land vales ranged from steady up to 16% in some regions of the state. Southern Illinois saw the largest increase in land values, with a 16% rise in land rated at average productivity and 13% for recreational land.
The value of highly productive farmland in the northern two-thirds of the state exceeded $5,000 per acre, with some tracts bringing $6,000 per acre and top quality farmland hitting $8,000 in the Chicago collar counties.
On average, the northern region saw a 10% price increase for excellent quality land and 12% for recreational land. The trend is for hunting clubs to purchase tracts and take it out of production.
Ethanol production plants also helped drive up local land values. The northwestern region of the state reported premiums of $250 to $300 per acre for land close to proposed or existing ethanol plants.
Prime farmland rose 5% in Central Illinois, with over 50 tracts selling for over $5,000. However, the supply of land on the market in the central region and marketing time frames were significantly longer than in recent years.
According to the report, 1031 tax-deferred exchange-driven demand for land softened throughout the year while interest from local investors and farmers increased.
Over the past four years, the value of prime farmland has jumped 45%. It rose 5% in 2006, 10% in 2005, 20% in 2004 and 10% in 2003.
For more information, check out the 2007 Illinois Farmland Values and Lease Trends report issued by the Illinois Society of Professional Farm Managers and Rural Appraisers. To order, call 262-253-6902. Cost is $7.50 per book, plus $2 shipping.