Farmland values throughout Farm Credit Illinois’ 60-county territory were relatively stable, with benchmark values increasing overall a mere 0.17 percent from last year, according to the 2019 annual study of 20 benchmark farms by the FCI appraisal team.
In the past four years, land values consecutively declined in the central and southern 60 counties of Illinois following the market peak in 2014. From 2015-2018, farmland values declined by 1.51 percent, 6.34 percent, 4.17 percent and 3.53 percent, respectively.
The 2019 results showed nine of 20 benchmark farms with a small decline in value, two were unchanged, and nine slightly increased. Results showed noticeable variation across land classes, reinforcing the fact that agricultural real estate is a location-specific asset. When considering the benchmarks individually, the year-over-year percentage changes ranged from –5.45 to +8.74 percent.
“Land values remain stable after four years of moderate decline. Historically, there is a correlation between commodity market conditions and farmland values. However, the decline in values has not been as significant as expected, primarily due to a limited supply of land being sold,” says Kent Reid , Farm Credit Illinois chief appraiser. “In any given year, less than 1% of land changes hands in Illinois.”
The market expects land values to continue declining moderately in correlation with moderate-to-low commodity prices, trade issues, and highly variable 2019 crop conditions.