In mid-year looks at land prices in several Midwest states, prices have soared so far.
According to the 2022 Purdue Farmland Values report, farmland went up 30 to 34% in Indiana again this year.
“The growing momentum is a little bit of a surprise,” Purdue University ag economist Todd Kuethe said on Aug. 24 during a webinar releasing the newest figures
Iowa land values are up 29%, according to the survey.
Illinois farmland is up 18% over last year, according to the Mid-Year Farmland Values Snapshot Survey sponsored by the Illinois Society of Professional Farm Managers and Rural Appraisers released at the Farm Progress Show in Iowa Aug. 31.
However, the peak may have been reached, as a flattening in prices paid for farmland in Illinois is expected for the second half of this year, according to the ISPFMRA report for Illinois. Its survey was done in the first two weeks of August.
In 2021, all pressures were upward. In 2022, almost all pressures are positive on farmland with the exception of interest rates, said Kuethe of the Center for Commercial Agriculture at Purdue University.
Those surveyed in Indiana last year expected Indiana farmland values to increase by double digits and they were correct, said Michael Langemeier, associate director for the Center for Commercial Agriculture.
In Illinois, the strong market during the first half of 2022 continues the trends from 2021. Illinois survey participants do not expect as large an increase in the second half of 2022, said Luke Worrell, overall chair of the Society’s annual Land Values and Lease Trends.
The average price increase of 18% occurred across the state and different land productivities, said University of Illinois ag economist Gary Schnitkey.
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Half of those responding to the survey believe prices have reached a plateau, with 56% expecting prices to remain the same during the second half of 2022. Fifteen percent expect prices to decrease between 1 and 3% while 12% expect similar increases, he said.
All expect interest rates to increase in the second half of the year. The group was equally divided in the amount of rate increase being over or less than 1%, Schnitkey said.
Illinois cash rents in 2023 are expected to increase by $17 per acre on excellent productivity farmland. Good productivity farmland is projected to have lower increases, with fair productivity having an $8 per acre projected increase, Worrell said.
Cash rents are up 10 to 13% in Indiana with top quality land renting at $300 per acre, according to Purdue’s results.
Illinois survey participants expect prices for the 2023 crop to average $5.60 per bushel for corn and $13.20 per bushel for soybeans. These prices are a continuation of the strong commodity prices seen since the beginning of 2021.
Fast facts for Illinois
40% of managers had at least one farm with an arrangement with a wind company.
38% of respondents manage at least one farm with an agreement with a solar company.
33% of managers expect some increase in wheat acres.
33% of the farm mangers indicate there is more interest in converting conventional farmland to organic farming.
Source: Illinois Society of Professional Farm Managers and Rural Appraisers