Illinois farmland prices see significant drop in 2015

PEORIA, Ill. (AP) - Illinois farmland prices saw a significant decline last year following the downward price trajectory of grain produced on the land, according to a new report from the Illinois Society of Professional Farm Managers and Rural Appraisers.

The group's annual farmland value report shows that agriculture acreage across Illinois dropped between 8 percent and 9 percent in 2015.

"This year, there's no doubt that farmland values softened," said the society's general co-chairman, David Klein of Soy Capital Ag Services in Bloomington. "There are certain areas that remain very strong - the Peoria area is still a very strong pocket relative to other areas of the state."

Land rated "excellent" and "good" both saw an 8 percent decline, selling at $11,737 per acre and $8,756 per acre, respectively. Land rated "average" sold for $6,215 per acre, a 9 percent decline.

"We've had over 18 years of increasing farmland values, and that's a historically very long run," Klein said.

For years, prices had increased by 3 to 6 percent annually, with occasional 10 percent increases in a single year recorded, according to Klein.

Farmland value across Illinois first showed signs of softening in 2014, when values remained flat or declined by 2 percent.

The recent decline represents a natural self-correction of the market after nearly two decades of increasing farmland values, and reflects grain prices that have recently dropped 30 percent to 40 percent from peak prices, Klein told the (Peoria) Journal Star (http://bit.ly/1PFo55j ).

Farmland value in 2016 will largely depend on the commodity prices of grain, he said.

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Information from: Journal Star, http://pjstar.com