What goes up must come down, as the saying goes. And sometimes when something goes up a lot…and rapidly…it must come down, too. That has been the case with farmland values in Illinois, according to the latest report from the Illinois Society of Professional Farm Managers and Rural Appraisers (ISPFMRA).
The challenges that Illinois faced over the past year mirror those in other similar Midwestern states: lower farm income, persistently elevated interest rates, previously fast-rising farmland values, and future economic uncertainty.
“…2024 was a year of transition. We did finally start to see some softening in the land market and some downward pressure on rental agreements,” summarized Luke Worrell, General Chairman, 2024 Illinois Farmland Values Survey & Conference.
Illinois Farmland Down 10% or More from Previous Highs
Class A and Class B land dropped for the first time in a half dozen years and have lost 10% or more of their value since their post-COVID peaks in 2022 and 2023, the ISPFMRA annual land survey found.
The trends that emerged in the final three months of 2024 had a heavy impact on the overall numbers for the year. Worrell wrote, “…the last quarter of 2024 was especially telling. That is the point at which we truly saw the most softening and it became apparent the market was beginning to shift. The overall 2024 results would have looked drastically different if we had only looked at the last quarter of the year.”
‘No Sales’ More Common in Illinois Farmland Auctions
The ISPFMRA survey reflected what some other states’ reports for 2024 showed in the increased number of auctions that failed to produce a buyer. “Many areas have seen continued unpredictability in the land market,” wrote Worrell.
“Sure, there will always be those strong sales that get the neighborhood talking, but by and large, the market has continued to be erratic and slowly work its way downward. There have been more ‘no sales’ in the auction world over the last 6 months than we saw in all of 2021-2023 combined.”
‘Excellent’ Illinois Farmland Lost Value in 2024
The median value of the highest-rated farmland, “excellent,” dropped to $16,500 in 2024. That represented a decline of $279 per acre from its record high in 2023.
Even with 2024’s decline, farmland value of the highest quality experienced appreciation of 14.45% since 2020.
‘Average’ Illinois Farmland Experienced Greatest Value Growth in 2024
“Average” quality land still saw appreciation in 2024 and swelled to $9,822. That was the best performing category that ISPFMRA measured in its survey. And it has grown the most since 2020 with a land value gain of 16.12%.
Looking ahead to overall performance in 2025, the survey found farm managers’ expectations for further declines in cash rents in 2025. Half expect 2026 cash rents to remain the same as 2025, half expect rents to fall, and none expected to see rents increase.
Most farm managers, according to the survey, expect 2025’s farm economy to remain the same this year with 18% holding a pessimistic view that the farm economy would worsen.
RELATED: Part of the unpredictability for farmland owners is the increased chance of recession. Could recession actually be “intentional?” Here is one view on that.
