Diverse Industries & Quality Soils Inform Illinois Farm Appraisals
The Illinois farmland market has seen parcels fetch over $20,000 per acre alongside auctions resulting in no sales, highlighting the dynamic and high-stakes nature of agricultural real estate in the region.
Certified appraiser Josh Miller covers in some of the most agriculturally diverse and productive regions of Illinois, including Mason, Tazewell, Peoria and Marshall counties. Having spent his entire life in Mason County and actively farming alongside his brother, he brings a deep understanding of the area’s unique characteristics and how they influence land values and brings his insights to the latest edition of the Compeer Financial Appraisal Report podcast, detailed below.
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Mason County stands out for its sandy soil, which makes irrigation a vital part of farming. This region is a global leader in popcorn production, ranking second worldwide, with Weaver Popcorn playing a significant role. In contrast, Tazewell County is known for being the top pumpkin producer globally, contributing to Thanksgiving tables everywhere. Alongside these niche crops, the fertile soils of the area support extensive corn and soybean production, as well as a growing number of organic farms. This diversity highlights the strength and adaptability of Illinois agriculture.
Farmland Market Trends Post-COVID
The Illinois farmland market has undergone significant changes in recent years, particularly since the onset of the COVID-19 pandemic. Land values have seen remarkable increases, with some areas experiencing up to a 60% rise within a short period. To keep pace with these rapid changes, Compeer’s appraisal team shifted from annual to monthly updates on benchmark farms. Despite challenges like rising interest rates and declining commodity prices, high-quality farmland remains in demand, with some parcels fetching over $20,000 per acre.
Location continues to play a pivotal role in land values. Premium land in desirable areas consistently attracts strong interest, while parcels with less optimal conditions are experiencing gradual softening. Recent trends have also shown variability in the market, with some parcels failing to sell at auction.
For example, farms with similar attributes in proximity to high-value sales have seen bids fall short of expectations, resulting in 'no sales.' This highlights the growing disparity in demand based on specific attributes and location.
The Impact of Green Energy Projects
Green energy projects, such as wind and solar farms, are beginning to shape the agricultural landscape. Newer wind turbines offer higher annual payments, but their overall impact on land values is yet to be seen. Solar farms, though newer to the area, also present an interesting dynamic. As these projects mature, their influence on property valuations will become clearer. In the meantime, they remain a hot topic in agricultural appraisal.
Challenges Facing the Ag Economy
Farmers in Illinois and across the nation face significant challenges, including higher input costs, lower commodity prices and evolving regulations such as California’s Proposition 12. These factors have slowed new construction in sectors like swine production and are squeezing margins across the board. Navigating these challenges requires strategic planning and careful decision-making.
Future Outlook
Looking ahead to 2025, continued market volatility is anticipated. Factors like commodity prices and interest rates will heavily influence the market. While these pressures may temper land values, the demand for high-quality farmland remains strong. Farmers with strong yields and solid financial positions will likely continue to pursue expansion opportunities.
Stay Informed on Land Values
Compeer Financial’s appraisal team is dedicated to providing specialized expertise to support farmers and landowners across the Midwest. Connect with your local appraiser to see what’s happening in your local marketplace or sign up for the appraisal e-newsletter to stay informed about the latest market trends.