With corn prices trending down most of the summer, farmers have been wondering what farmland prices might do. The market is still strong, according to the 2013 Mid-Year Land Values snapshot survey conducted in Illinois. Heartland Ag Group’s Dale Aupperle talked about the survey in a report at the Farm Progress Show in Decatur, Ill.
“There was a tremendous push on land sales at the end of 2012 because of uncertainties concerning income tax treatment in 2013 and beyond,” Aupperle said. “This led to a great deal of farmland being sold last year that might otherwise have been available to the market in 2013. As a result, there is still a demand for farmland but not much available for sale.”
As of July 1, 2013, he said, farmland prices averaged $13,200 for excellent quality farmland in Illinois, $11,200 for good land, $9,000 for average quality land and $8,300 for fair quality farmland. That’s an increase of 3 percent for excellent and good quality farmland, 2.5 percent for average quality and 1.9 percent for fair quality farmland.Aupperle said farm real estate professionals believe land prices could soften in the months ahead, in part due to the lower commodity prices.
But they believe 190-bushel corn at $5 per bushel will continue to provide “an income stream” to support prices close to current levels. If prices fall to $3.50 or lower then growers will face a different situation.
In the Southeast and Mid-South, another survey indicates higher appreciation of non-irrigated and irrigated farmland and pasture land in recent months. A survey released by the Farmland Investor Letter indicates non-irrigated cropland values averaged $3,141 per acre, irrigated cropland values $4,477 per acre and pasture land $2,239 per acre. For more information about the survey, go to www.farmlandinvestorcenter.com http://www.farmlandinvestorcenter.com/ .