2019 Western Illinois Land Values Up; 2020 Predictions

April 11, 2020

The most recent edition of the Illinois Farmland Values and Lease Trends report was recently released by the Illinois Society of Farm Managers and Rural Appraisers (ISPFMRA). The annual report is produced each March and offers data and analysis regarding the previous year’s land market and lease trends. The state is divided into 10 regions with land professionals supplying data and critical thinking. For this brief article, I’ll summarize the findings for Region 3, which is large and includes 11 counties: Stark, Peoria, Knox, Fulton, Warren, McDonough, Schuyler, Hancock, Adams, Brown and Pike.

Granted, the publication was printed before the current COVID-19 pandemic, but it did provide some much needed “good news.” Let’s take a look back at 2019 before glancing forward.

I’ve been farming with my dad for 12 years, and 2019 was the craziest crop year I can remember. Our area in Western Illinois was hit particularly hard with the wet spring, resulting in many unplanted acres while taking Preventive Planting measures. What transpired to a large degree was uninspiring crops and very difficult logistics for growers. While we were all hopeful for a large-scale commodities rally, it never came. Despite that, we did make it through the difficult year. Looking back at the data included within the ISPFMRA Land Values and Lease Trends report, there were several positive surprises in 2019.

First and foremost, the sales history shows that land values in Region 3 either held steady or slightly increased across the board. This was a nice change of pace, as we had been seeing moderate declines for the last several years. Two years of MFP payments likely helped stabilize some operators and therefore kept some in the land market. We also saw a steady supply of inventory changing hands. While colleagues in other areas of the state saw drastically fewer transactions, ours in Western Illinois were steady with even an increased supply of “Average Productivity” or Class C farms (PI 100-116).

Cash rents also seemed to hold firm across the various types of farms as the study showed no change between 2018 and 2019. There is little doubt the MFP payments helped in this regard as well.

If we thought 2019 was wild, we had no clue what was in store for us here in 2020! We are indeed in trying times and facing many unknowns. The world is changing quickly and that is certainly the case in Agriculture. Historically speaking, when stocks and equities struggle, that can lead to some firmness in the land market. Tangible assets like farmland aren’t bulletproof, but I remain hopeful the current economic crisis will play out similar to 2008-2012 when other sectors of the economy really struggled, but land values increased. The news changes daily, so it is too early to tell what will take place for the remainder of 2020. However, I am optimistic that Agriculture can weather this storm and be a key piece in getting the nation back on track.

I look forward to serving Western Illinois during these volatile times. I am thankful for the opportunity and I know operators and owners in the area are up for the challenge.

Written by Adam Bauer, Land Broker with Worrell Land Services, LLC. Adam focuses primarily on land real estate in Schuyler, Brown, McDonough, and Fulton Counties.