Farmland Appreciation: Illinois Case Study

Farmland values have been on a significant upward trajectory in recent years, particularly in the Corn Belt. In Illinois in particular, farmland has appreciated by 30% over the past three years, far outpacing the USDA’s long-term average of 6% annually.

Despite this impressive appreciation, farmland remains an opaque and complex market. To make informed decisions, having reliable data is paramount.

To illustrate this, our team took a look at Class A farmland in six counties in central Illinois (McClean, De Witt, Logan, Sangamon, Macon, and Christian). Using Acres’ extensive land sales database, we pulled 974 transactions from 2018-2023. This includes public listings, auctions, and off-market transactions. Steps were taken to remove non-arm’s length transactions.

To account for differences in soil quality within Class A farmland, these transactions were analyzed on a price per soil productivity point basis.

Here are the results.

1. Farmland Values on the Rise

The Trend: The median selling price in central Illinois from 2018 to 2023 increased 60.3%, reflecting a broader trend in agricultural regions. This appreciation has significant implications for everyone involved in the farmland market.

The Takeaway: Historically, farmland has appreciated steadily, but the recent surge suggests a combination of factors—such as high demand, limited supply, and favorable agricultural conditions—pushed values higher.

2. Market Variability

The Trend: Data from central Illinois reveals a 21.5% average spread in transaction prices for Class A farmland on a price per soil productivity point basis. 

The Takeaway: This variability shows that even in a more homogenous market like Class A farmland, prices can vary significantly based on factors such as location, method of sale, topography, presence of drainage tile, and more.

3. Increased Variability Alongside Rapid Appreciation 

The Trend: From 2018 through 2020, the average annual spread between the 25^th and 75^th percentile of transactions was 18.9%, but this average spread increased to 24.1% as farmland values rapidly appreciated from 2021 through 2023.

The Takeaway: This increased variability in a market that experienced rapid appreciation makes accurate and up-to-date information more important than ever for making informed decisions, whether it’s setting a sale price, underwriting a loan, or evaluating a potential farmland acquisition.

Final Thoughts

Farmland values in the Corn Belt, particularly in Illinois, have experienced significant growth in recent years. While this appreciation is good news for many landowners and investors, it also presents challenges for land professionals. By focusing on the data and understanding the factors behind these trends, stakeholders can make more informed decisions in a rapidly changing market.