Land is always a major topic, especially in West Central Illinois. Whether it is the soil temperature, water resources, yields, or land values, the topic makes its’ way into a conversation among farmers. In recent years, record high sales on farm ground have been seen. Just last fall, tillable ground was selling at $22,000 and $23,000 an acre and just last month, Midwest Bank CEO Chris Gavin reports land up for auction didn’t sell, but was then purchased privately later, indicating the high land values are softening:
“I think that is an indicator of what is happening there, so it is starting to have an impact. There has been some 1031 exchange money out there. My sense is that is starting to run out, maybe some more shows up here in Western Illinois, but that was supporting the market last fall and we are not seeing that right now. It is definitely going to have an impact; hopefully, we just don’t have that disaster situation or we could really see some devastating effects.”
While you hear more about outside buyers purchasing farm ground from out of state, Gavin says that has not been the case locally,
“I see a lot of new real estate businesses popping up, some people that are marketing real estate farmland and they are not just local, right. There are people coming from outside and are marketing farm real estate. It was hunting land, but now it has broadened to farmland, but we are not seeing it have a big impact yet. We have not seen a lot of that. Most of the land has all been going to farmers, which is good, it is what we want to see, either that or people coming to 1031 exchanges. They are coming from the Midwest and are putting money back into the farm real estate.”
Meanwhile, around the state of Illinois, the Society of Farm Managers and Rural Appraisers released in a survey that a softening of land values is also being seen. Holly Spanger, Prairie Farmer Senior Editor, shares prices won’t sustain that level they were at:
“They have talked all year that prices can’t sustain that level that they were at, right, some of that interest is going to taper off. I am hearing a lot too that there are still a lot of older farmers with cash who want to reinvest in the land. It is a solid investment for them over time, which is good because it keeps it in the hands of farmers.”
In 2022, Spangler says Prairie Farmer published a report on the top absentee landowners in seventeen counties in Central Illinois, which discovered the Morman Church as the largest absentee owner of prime Central Illinois farm ground.
