Farm Progress America, September 4, 2024

Mike Pearson takes a look at a new survey released last week that involves the first decline in Illinois farmland values in years.

At the Farm Progress Show, farmland experts discussed a cooling trend.

After several years of rapid increases, a survey shows that farmland prices have dropped.

The survey by the University of Illinois and Illinois Society of Farm Managers and Rural Appraisers, showed land values have softened.

Prices have fallen 5 percent for excellent and good quality land.

Prices have fallen 8-10 percent for average and fair land.

Experts are quick to point out it's a correction not a crash.

The falling prices are attributed to higher interest rates and lower gross farm income.

According to the survey, 89 percent expect further declines.

And over 50 percent expect lower prices in the next two years.

The survey also showed many expect lower cash rents in 2025 with a drop of between 7 and 9 percent-- which would mean about a $25 drop in Illinois.

The survey also showed flex leases are gaining popularity with 35 percent farm managers utilizing them which typically adjust payments according to profits.

The survey also showed 63 percent of land buyers are farmers.

Farm Progress America is a daily look at key issues in agriculture. It is produced and presented by Mike Pearson, farm broadcaster and host of This Week in Agribusiness .