Rise in farmland prices slows

- Champaign/Urbana News

 

29 8월, 01:51www.news-gazette.com

URBANA — Farmland prices in Illinois are rising this year, but not at the double-digit rates of the last two years, a survey for the Illinois Society of Professional Farm Managers and Rural Appraisers shows.

 

 Average increases ranged from 1.9 percent to 3 percent, depending on the quality of the land, according to the mid-year survey compiled by University of Illinois Professor Gary Schnitkey.

 

 "These ... are not at the level of increases we've seen in recent years, but they are still upward," said Dale Aupperle, chairman of the society's annual Illinois Land Values and Lease Trends project.

 

 In March, the society's annual survey showed Illinois farmland prices rose by about 20 percent in 2012 — roughly the same percentage they had risen in 2011.

 

 About 73 percent of buyers were farmers, while 12 percent were local investors, the mid-year survey showed. only 8 percent were non-local investors. The remaining 7 percent were either institutions or other buyers.

 

 The number of non-local investors has slipped, likely the result of other investment options such as the stock market, Schnitkey said in a release from the society.

 

 On July 1, farmland prices averaged $13,200 an acre for "excellent-quality" farmland — land that normally averages 190 bushels of corn per acre.

 

 For good-quality farmland — land that would normally produce 170 to 190 bushels of corn per acre — the average price was $11,200 an acre.

 

 Average-quality farmland fetched $9,000 an acre, while fair-quality farmland went for $8,300 an acre, the report said.

 

 As might be expected, the largest average increase — 3 percent — was for excellent and good land, while the smallest average increase — 1.9 percent — was for fair land.

 

 Aupperle said there was "a tremendous push" for land sales in late 2012 as a result of uncertainty over income tax treatment in future years.

 

 "This led to a great deal of farmland being sold last year that might have otherwise been available to the market in 2013," he said. "As a result, there is still a demand for farmland but not much available for sale."

 

 Much of the survey dealt with what society members expect going forward.

 

 Forty-one percent said they expect farmland prices to remain the same over the next year. Another 39 percent said they look for price decreases, while 20 percent expect increases.

 

 Respondents were divided over expectations for the next five years. Forty-six percent said they expect farmland prices to rise an average of 1 to 5 percent per year, while 45 percent said they expect the price to drop. only 9 percent look for farmland prices to stay the same.

 

 The mid-year survey supplements the society's larger, year-end efforts to document farmland prices and cash rents.

 

 Respondents said they expect small decreases in cash rents in 2014. Excellent-quality farmland commanded an average cash rent of $388 an acre in 2013, and farmers said they expect that to fall to $374 an acre in 2014.

 

 Most respondents said they expect production costs to go down slightly in 2014.

 

 The survey showed 56 percent look for lower production costs, while 23 percent expect increases and 21 percent count on costs staying the same.

 

 The survey found an increase in the use of variable cash-rent leases and cash rents, and a decrease in the use of share rents and modified share-rent leases.