News

Illinois land values reflective of current ag economy

A farm management specialist says land values in the state of Illinois are reflective of the current ag economy.

David Klein with Soy Capital Ag Services says 2016 farmland values dropped for a second consecutive year.  “Our 2016 highest quality land is down 5 to 6 percent as well as the good quality land,” he says.  “As we got into some of the lower quality soils – they’ve dropped 12 to 14 percent across the state by year end.”

He tells Brownfield the softening of land values has resulted in a renewed interest in buying land – from both farm and non-farm investors.

Klein says if buyers are positioned well, land remains a solid investment.  “As other investments start to inflate – as you look at the stock market and things of that nature – we see those involved in the investment community looking to diversify further,” he says.  “That is leading to some of the interest level in land – especially in this first quarter of 2017.”

As for cash rents, Klein anticipates a slight drop this year.  “That’s based directly on the returns the farm is going to generate – for the most part,” he says.  “The discount is not quite as high as maybe what it was a year ago.  We’re start to see between a $5 and $25 per acre reduction.”

He says there are multiple factors driving the decline of farmland values across the country, but the relatively tight supply in Illinois has kept prices more stable.

AUDIO: David Klein, Soy Capital Ag Services