Low Returns, Crop Prices Keeping Pressure on Farmland Values
Gary Schnitkey, Agricultural Economist - University of Illinois
The price of Illinois farmland is falling. Todd Gleason has more on the pullback.
Over the first six months of the year the price…
2:08 radio self contained
2:08 self contained
Over the first six months of the year the price of farmland in Illinois dropped between three and seven percent shows a new survey. The numbers were analyzed by the University of Illinois and given the decrease those responding to the poll expect Illinois cash rents to drop by about $20 an acre next year. Although, U of I agricultural economist Gary Schnitkey has penciled in $17.
Schnitkey :22 …combining the two, we have less of a decline.
Quote Summary - The Illinois Society members indicated cash rents were coming down $20. We are using $17 in our budgets to account for the fact not all land is managed by Society members and there is still some land that is below average cash rent. So, combining the two, we have less of a decline.
Those surveyed by the Illinois Society of Professional Farm Managers and Rural Appraisers say land values are down 3.3 percent for Excellent-quality farmland - 190 bushel corn and above at $11,100 per acre; 4.5 percent lower for Good-quality land - 170–190 bpa at $9400 bucks; off 5.6 percent on Average-quality land - 150–170 bushels at $7600; and dropped 7.0 percent for Fair- quality land to $5800. That’s on land yielding less the 150 bushels of corn to the acre.
Overall, respondents are more pessimistic about prices at midyear this year compared to recent surveys with a full 90 percent expecting some further decreases. Another one to ten percent drop says Gary Schnitkey.
Schnitkey :12 …somewhere between zero and ten percent.
Quote Summary - Most of the members believe there will be a decline in the next six months. Eighty-three percent believe that decline will be somewhere between zero and ten percent.
The survey is part of an ongoing and larger annual Land Values and Lease Trends project conducted by the Society.