MAHOMET, Ill. — Farmland values throughout central and southern Illinois increased 8.1% on average from last year, according to the 2023 study of 20 benchmark farms by the Farm Credit Illinois (FCI) appraisal team. The study has occurred annually since 1974.
Land values had a dramatic run-up beginning in 2003, until peaking in 2014. The first decline in more than a decade began in 2015 and continued a slight decline through 2018. From that point, land values increased again for five consecutive years, hitting new highs in 2023. While this sets a new peak for the study, 2023 values rose more moderately than reported in 2022.
Fifteen of the 20 benchmark farms increased in value while one showed a slight decline. Results across all land classes showed considerable variation, reinforcing that agricultural real estate is a location-specific asset. When considering the individual benchmarks values, the year-over-year changes ranged from -5.3% to +31.3%.
“Farmland in 2023 continues displaying its strength despite rising interest costs,” says Kent Reid, Farm Credit Illinois chief appraiser. “A new peak in the market was set once again, influenced by profitable commodity prices, constant demand coupled with limited supply of farmland, and stabilized balance sheets on many farms.”
The 2023 benchmark update for the Farm Credit Illinois territory shows continued strength in the farmland market. The economic health of farmers and farm owners is mostly stable, but there are still pressures on farmers’ financial positions. Increasing interest rates, rising cash rents, and fluctuations in commodity prices will be a challenge for the upcoming year. Overall, an increase of 8.1% indicates a solid market throughout FCI’s 60-county territory. Farmland values hit record highs in 2023 and all signs indicate they will remain at this level in the near-term.
Read an in-depth analysis in the full report at www.farmcreditIL.com/benchmark.
— Farm Credit Illinois