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Aug. 28, 2025 Source: Illinois Society of Farm Mangers and Rural Appraisers Decatur, IL - Prices being paid for Illinois farmland dropped slightly in the first half of 2025 according to the Mid-Year Snapshot Survey of farmland prices by the Illinois Soecity of Farm Mangers and Rural Appraisers at a press conference today at the Farm Progress Show being held here. The Survey is a annual event as a follow-up to the larger Farmland Values and Lease Trends project done earlier in the year. The survey was conducted by Gary Schnitkey, Ph.D., University of Illinois and included responses from ISPFMRA members as well as others associated with Illinois farm real estate. Survey respondents indicated that while 31 percent indicated no changes in prices being paid, the balance reported the following declines: -2.2 percent for excellent quality farmland; -3.5 percent for both good and average quality land; and, 3.0 percent for fair quality land. Sales of the properties were most estate sales (61 percent); 11 percent were by local investors and 10 percent were by farmers. The balance were non-local investors, institutions, and 'others.' Buyers were predominately farmers (61 percent)' local investors (17 percent); non-local investors and institutions (10 percent each), and; 2 percent 'others.' Schnitkey noted that 11 percent of the sales involved farmers with financial difficulties. Fifteen percent of the transactions involved a foreign investor. Continuing Trend In addition to the reported drop in prices paid, most respondents expect farmland prices to decline slightly or remain stable during the second half of 2025: 49 percent expect declines of less than 3 percent and 33 percent expect prices to remain the same. The remainder, 18 percent, expect farmland prices to decline by more than 3 percent.. This comes as a majority, 76 percent, expect lower interest rates during the second half of 2025. Seventy three percent expect more sales through listings rather than auctions. Transactional history shows listings are often preferred instable or declining price environments. As to 2027, those responding see a flat market with 24 percent expecting higher prices, 44 percent expect things to stay the same while 33 percent expect to see further drops in prices paid. Cash Rents Dropping Most farm managers are expecting 2026 rents to be lower than 2025 rents by between $15 and $20 per acre. On a land quality basis, rents for excellent land are forecast to drop from $391 per acre to $374; Good quality land will drop from $337 to $316; Average land will drop from $275 to $259; and, Fair land will drop from $225 to $209. Anticipated prices for the 2025 crop are expected to be in the range of $3.95 per bushel of corn and $9.95 for soybeans. Seventy six percent feel these prices will trigger another round of ad hoc disaster payments similar to the Emergency Commodity Assistance Program payment for 2024. Farm managers continue to see stability in farm lease arrangements into 2026, but with a continuing trend to more cash leases, and fewer share rent leases. Rental Arrangements Respondents indicated the following use of alternative farmland leases: •21 percent are share rent leases, •14 percent where modified share rent leases, •25 percent are cash rent leases, •34 percent are variable cash rent leases, and •6 percent are custom farming arrangements. •The average supplement rent on a share rent lease is $31 per acre. Over time, variable cash rents have increased and share rent leases have declined. Farm managers continue to see stability in farm lease arrangements into 2026, but with a continuing trend to more cash leases, and fewer share rent leases. For variable cash rents, the most common cash rent has a base cash rent regardless of prices, yields, or incomes. A bonus payment is entered into the calculation based on revenue. •88 percent of variable cash rents have a base rent that is paid regardless of prices, yields, or incomes, •77 percent have a payment if revenue exceeds specified levels, •6 percent have a payment based on price, •6 percent have a payment based on yield, and •14 percent have costs of production enter the calculations of rent. Farm yields are used in 91 percent of the cases when yields enter rent calculations. County yields are used in the other cases. When price enters rent calculations, multiple prices at delivery points are the most common method for arriving at the price. •59 percent of leases use multiple prices at a local delivery point, •34 percent use futures prices, and •6 percent use one price at a delivery point. Crop insurance and/or government payments are used to calculate rent payments in 31 percent of the leases. When gross revenue is used to calculate a bonus, the average percentage is 35 percent for corn and 39 percent for soybeans. Most respondents are satisfied with the performance of variable cash leases: •50 percent indicated they were very satisfied, •47 percent indicated they were satisfied, and •3 percent indicate they are dissatisfied. Most respondents are also satisfied with the performance of variable cash leases: •43 percent indicated they were very satisfied, •50 percent indicated they were satisfied, and •6 percent indicate they are neutral. The majority indicate that variable cash rent arrangements make negotiations easier as compared to fixed cash rent arrangements: •25 percent indicate that negotiations were much easier, •58 percent indicate that negotiations were somewhat easier, •12 percent indicate that negotiations were about the same, and •Only 3 percent indicate that negotiations were harder. Most respondents indicated that lease terms do not change every year with 66 percent indicating changes occur periodically, and 28 percent indicated that lease terms seldom change Of the remaining 6 percent, half indicate that changes occur every other year and half indicate that some terms change annually. Tweet |
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