2016 Spring Farm Outlook

2016 Logan County Farm Outlook Magazine

Lincoln Daily

March 24, 2016 17

What is going on

in farmland sales?

ower profit margins and commodity prices are affecting land sales

in 2016. John Hartman, who works for Farm Credit Services in

Sherman, shared some trends he is seeing.

Hartman said, “Farmland sales have recently been around $12,500 per

acre and are now around $11,000. The crop profit per acre can vary, but

profit margins and interest rates affect land value.” He said the University

of Illinois 2016 crop budget, operator and land return amounts, are around

$260 an acre.

Hartman notes, “Land sales are a bit softer than six months to a year ago

due to lower profit margins and lower commodity prices. The 2015 farm

income was down considerably.” He said most farming operations rent

more than they own through crop share or cash rent.

Hartman also said “Land prices have softened due to the lower

commodity prices and profit margins, so people are proceeding cautiously.

Expenses have not come down much and profit margins are still very

tight. Interest rates are very reasonable, though not as low as they were

two years ago. At the current time, rates are three percent below what they

were in 2008.”

This downward trend was predicted last fall. Surveys done during fall

2015 by the Illinois Society of Professional Farm Managers and Rural

Appraisers showed, “Prices being paid for farmland across Illinois

are continuing a softening trend that is following prices being paid

for commodities, with decreases of between two and seven percent,

depending on the quality of farmland and location.”

In farmdocdaily’s “2016 Farmland Price Outlook,” Gary D. Schnitkey,

Bruce Sherrick, and Todd Kuethe from University of Illinois at Urbana-

Champaign’s Department of Agricultural and Consumer Economics, also

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