Agricultural Economic Insights researchers, Randy Dickhut and David Widmar, recently leveraged Acres’ transaction data to answer the question: Is it true that 2% of farmland changes hands annually?
Their research focuses on farmland transactions in Illinois and reveals a nuanced take on this widely accepted rule of thumb.
Key Takeaways
State-level data shows significant variability year to year: An average of 1.7% of farmland was sold annually between 2018 and 2023, but when looking at trends year over year, this varies between a low of 1.5% in 2018 and a high of 2.2% in 2021.
Greater variability can be seen between counties: Drilling down to a county-level reveals even more variability, with southern, western, and northeastern counties selling more than 15% of farmland acreage between 2018 and 2023. This is more than double the accepted rule of thumb, which would suggest that 6% of this land would have been sold during this time period.
Farmland in Illinois has sold at a faster rate than the 2% rule implied: This transaction-based analysis shows greater variability than expected for farmland sales over time and geographies. Dickhut and Widmar suspect this type of analysis would show the same across different states and regions as well.
Final Thoughts
Historically, it has been difficult to access farmland transaction data, creating a reliance on anecdotal evidence and local observations to understand the market. Acres’ land transaction database offers a new understanding of the market, giving researchers and land professionals the ability to quantify trends.
Read the full report on the AEI website.
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