(The Center Square) - The average farm real estate values for Illinois in 2022 increased $1,000 per acre over last year. That mirrors the rising value of farmland in other Midwest states including Indiana, Iowa, Missouri, and Ohio.
Brad Zwilling, vice president of Data Analysis for the Illinois Farm Business Farm Management, said this is the biggest one-year price jump since 2013.
"This increase we saw this year was 12.7 percent, going from $7,900 to $8,900," Zwilling said. "That is the first time we saw a double-digit increase since 2013."
In 2013, Illinois farmland values rose from $6,000 an acre to over $7,000, he said.
The price per acre includes the value of all land and buildings. The price of cropland jumped even more. "Cropland went up $1,050 an acre, or 13.3 percent," Zwilling said.
Farm values were up all across the farm belt, the report shows. Indiana farm values were up by 12 percent, like Illinois'.
"Iowa increased 21 percent," Zwilling said. "So, the corn belt - Illinois, Indiana, Iowa, Missouri and Ohio - had an average increase of almost 15 percent."
The report pegs Iowa farmland at $9,400 an acre, the highest priced farmland in the survey, he said.
The figures were compiled by the National Agricultural Statistics Service of the U.S. Department of Agriculture. Every year, NASS releases a report of estimated values based on its survey of farmers.
"Everything moved up this year and I think it is going to move up some more when 2022 is completed," Zwilling said.
The latest NASS survey Farmdoc Daily was done in spring, before interest rates began to double and triple.
"Higher interest rates did not affect this survey because it was done in the late spring, so it will be interesting to see what happens," Zwilling said.
Rising grain prices are one of the driving factors behind the high farmland values, Zwilling said.
Farmland is a popular investment because it is tangible, Zwilling said.
"Farm ground is an asset that investors can see, and it is showing a return," he said. "The land will always be there. It is not going to go away."
Crop prices were up in 2021 and 2022, so there was cash available for down payments. Interest rates were low, so farmers and investors had buying power.
The price of Illinois farmland has been steadily increasing since the late 1990s, Zwilling said.
From 2015 through 2019, increases in farmland values leveled off. When farm incomes went up in 2021 and 2022, that naturally became a driving factor for the increase in farm ground prices, Zwilling said.