Skip to main content
You are the owner of this article.
You have permission to edit this article.
Edit
Farmland values start strong in 2021

Farmland values start strong in 2021

So far this year, some central Illinois farmland is selling for record prices, said Diane Zelhart, certified general appraiser for Compeer Financial.

There’s been an auction in all seven central Illinois counties with prices up between 5 to 10%, she said.

“At one auction in McLean County in March, the land went for $14,400,” Zelhart said.

Zelhart is a member of the team that gathered information for the 2021 Illinois Farm Values and Lease Trends report that focused on prices in 2020. Across the state last year, prices were reported to be stable with some slight increases in some regions.

But for 2021, Seth Waibel of Waibel Farmland Services in Mahomet is seeing the same upward trend in the seven eastern Illinois counties he represents.

The uptick started in November and December with some sales closing in January.

“Things continue to strengthen,” said Waibel, also a member of the Illinois Society of Professional Farm Managers and Rural Appraisers and involved in compiling information for its annual report. “Overall compared to September last year, Class A land prices have increased in the ange of 10 to 25%. It’s a broad range, but we’ve had a broad range of sales.”

There were some unusual sales in eastern Illinois last year. In Douglas County, almost 2,200 mostly contiguous, mostly Class A farm land acres sold for more than $10,600 per acre, totaling more than $23.1 million, said Brian Waibel, Seth’s father.

Several families over multiple generations put together these 18 tracts with property owned by Princeton Mining Company, Inc. It was purchased by an absentee investor group based in San Francisco.

“This was one of the largest mostly contiguous acreages ever sold in Douglas County,” Brian Waibel said.

“It’s not uncommon to get big contiguous acres out West, but it is somewhat unusual here,” Seth Waibel said.

Zelhart, in Livingston County, and Seth Waibel, in Champaign County, note the biggest increases in land prices are in Class A land. Class A or “excellent” land has a productivity index of 133-147 (the highest). Good land has a productivity index of 117-132; average land, 100-116; and fair, less than 100.

Good drainage is one of the things that improves prices. It’s like having a good roof on a house, Zelhart said. People don’t want to buy it and re-roof it. The same goes for farm land that needs tile.

However, some of the average and fair land in Mason County, where there is more sandy soil and irrigation, have also been showing an uptrend.

“It shocked our appraisers there,” Zelhart said.

A parcel of irrigated land in Mason County sold for $10,650 per acre. Fair land in Mason County, selling earlier for $5,000, is now $7,000 and up, she said.

At the virtual land values conference, farm managers said there is concern about getting more tiling done this year. During the pandemic, there was a slowdown in production of tile and costs will be higher.

Demand for land is high from both investors and farmers, Zelhart said.

Farmland prices in the first quarter of 2021 have been higher than in 2020 and 2019, she said. What was selling for $10,000 to $12,000 is now selling for $12,000 to $14,000. The combination of higher commodity prices, government stimulus money and lower interest rates are holding prices higher, she said.

Zelhart was busy in 2020 as people needed appraisals to refinance at lower interest rates, to assess the value of what they owned as well as for buying or selling.

This is the end of the pre-spring auction period and people are turning their attention to planting. The focus will then be on economic factors and how they might affect land prices. Interest rates are expected to stay low for a while. Some experts believe another stimulus package is likely. Focus will be on the planting season, the USDA report and in turn, commodity prices.

These will give an inkling if prices will stay at this level or keep climbing, she said.

“I think 2021 will be just as interesting as 2020,” Zelhart said.

CropWatch Weekly Update

* I understand and agree that registration on or use of this site constitutes agreement to its user agreement and privacy policy.

Phyllis Coulter is Northern Illinois field editor, writing for Illinois Farmer Today, Iowa Farmer Today and Missouri Farmer Today.

Related to this story

Find the equipment you're looking for

Get up-to-the-minute news sent straight to your device.

Topics

Breaking News