Farmers Weekly Review

Farmland values are “softening” with “some downward pressure on rental agreements” according to the 2025 Illinois Farmland Values and Lease Trends Report released recently at the Illinois Land Values Conference.

It is sponsored annually by the Illinois Society of Farm Managers and Rural Appraisers (ISPFMRA). The survey is conducted annually by members of the ISPFMRA. The state is divided into 10 geographic regions and team members collect and summarize sales activity and other factors occurring in the individual regions during the year. The is a summary of all the regional entries.

According to Luke Worrell, AFM, ALC, with Worrell Land Services, Jacksonville, IL, and overall chair of the annual Land Values and Lease Trends survey by the ISPFMRA, “2024 was a year of transition. We did finally see some softening in the land market and some downward pressure on rental agreements.

“As you will read in (the Report), 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.

Using Excellent Productivity land with a Productivity Index of 133 and above, the average sales price of completed sales across the state in general dropped by 3.29 percent from $16,359 in 2023 to $16,359 in 2024 while the average price for Average Productivity land with PI of 100 to 116 actually increased by 4.45 percent from $9,544 in 2023 to $9,978 in 2024.

However, this compares to an upward jump of 14.82 percent for the same type of property from 2020 to 2024. According to Worrell, “Those changes have continued here in the early stages of 2025. Many areas have seen continued unpredictability in the land market. Sure, there will always be those strong sales that get the neighbor hood 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. Commodity prices, rising interest rates and other macro-economic factors have all played a part in this changing market.”

Expectations for 2025

According to a simultaneous and allied survey by Gary Schnitkey, Ph.D., University of Illinois, most respondents expect farmland prices to remain the same or decline in 2025, with only 5 percent expecting farmland prices to increase. In total, 31 percent of the respondents expect farmland prices to remain the same, while 64 percent ex pect prices to decline. Almost half (49 percent) of the respondents expect a decline of less than 5 percent, whereas 13 percent expect a decline between 5 and 10 percent. Only 2 percent of the respondents expect a decline of over 10 percent.

Schnitkey says the 2025 outlook is remarkably similar to that at the beginning of 2024. The percentage for decreases in 2024 and 2025 are the same at 64 percent. More than 50 percent of past respondents expected declines from 2015 to 2019, a period in which farmland prices remained relatively stable, with price declines in some years.

The percentage of respondents expecting declines then decreased from 2020 through 2022, reaching a low of 3 percent in 2022. Corresponding to the low percentage of participants expecting price declines, farmland prices increased dramatically in the early 2020s. In 2024 and 2025, percentage of respondents who expect price declines is on the rise again, reaching similar levels to those in 2018 and 2019.

Rent Prices Declining As Well

According to Schnitkey’s survey, “Results show that incomes for rented farmland was lower in 2024 than in 2023. Cash rents decreased heading into 2025, with expectations for further declines into 2026. Average income was defined as gross revenue less all expenses, including a deduction for property tax.

“For Excellent quality farmland, traditional crop shares averaged an income of $230 per acre, cash rents averaged $325 per acre, and custom farming averaged $367 per acre. Custom farming resulted in the highest return among these arrangements. Overall, 2024 Incomes dropped from levels reached in 2023 with -$120 per acre for traditional crop share on Excellent farmland and $25 for cash rents on the same soils.

Looking Forward

Farm managers were asked about their expectations of cash rents in 2026:

• None expect 2026 cash rents to increase over 2025 levels,
• 50 percent expect 2026 cash rents to be the same as in 2025, and
• 50 percent expect 2026 cash rents to decrease from 2025 levels.

According to Schnitkey, most farm managers expect the agricultural economy to remain the same in 2025: 72 percent expect 2025 to about the same as 2024, while 18 percent expect worse conditions. Few expect conditions to improve.

Full Report Available at No Cost

Worrell notes that for the first time, the ISPFMRA is making the complete report available immediately and at no charge to those interested in exploring the 114-page document. “All the information, tables, charts, sales by region, timing and land classifications that we’ve been referring to are in the Report. And it’s free of charge. “Frankly, the cost of mailing the document became so outrageous we determined the best way to get the infor mation out there was to make it available as a free, downloadable PDF at our website www.ispfmra.org.

“As an extra bonus to readers and advertisers, most ads have a hot link that will take readers directly to the advertisers’s web site. This makes it more convenient for making contact with those companies while you are reading the Report.”

He notes that printed copies are available for order at $20 per issue, delivered. Order information is available on the site as well. www.ispfmra.org.