Midyear survey finds softened farmland prices

DECATUR, Ill. — A midyear snapshot survey indicated a slight drop in prices being paid for Illinois farmland.

The Illinois Society of Professional Farm Managers and Rural Appraisers midyear survey results were released at the Farm Progress Show and serve as a follow-up to the more extensive Farmland Values and Lease Trends project earlier this year.

The survey was conducted by Gary Schnitkey, University of Illinois agricultural economist, and included responses from ISPFMRA members, as well as others associated with Illinois farm real estate.

Luke Worrell, of Worrell Land Services in Jacksonville, ISPFMRA Land Values and Lease Trends Report Committee chair, gave an overview of the findings at the Farm Progress Show in Decatur on Aug. 27.

While 31% of survey respondents indicated no changes in prices being paid during the first half of 2025, the balance reported the following declines: minus 2.2% for excellent quality farmland; minus 3.5% for both good and average quality land; and 3% for fair quality land.

Excellent quality farmland is defined as having a soil productivity index of 133 or higher; good quality farmland, soil productivity index of 117 to 132; average quality farmland, soil productivity index of 100 to 116; and fair quality farmland, soil productivity index under 100.

Sales

Most of the transactions, at 67%, were estate sales; 11% were by local investors, 10% were by farmers, 7% were non-local investors, 4% were institutions and 1% was “others.” The balance was non-local investors, institutions and “others.”

Buyers were predominately farmers, at 61%; local investors, 17%; non-local investors and institutions, 10% each; and 2% were “others.”

Worrell noted that 11% of the sales involved farmers with financial difficulties, 15% of the transactions involved a foreign investor, while 32% had a transaction with an institutional 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.

Forty-nine percent expect declines of less than 3%, and 33% expect prices to remain the same. The remainder, 18%, expects farmland prices to decline by more than 3%.

This comes as a majority, 76%, expects lower interest rates during the second half of 2025.

The survey found that 73% expect more sales through listings rather than auctions. Transactional history shows listings are often preferred in stable or declining price environments.

Looking ahead to 2027, those responding see a flat market, with 24% expecting higher prices and 44% expecting things to stay the same, while 33% expect to see further drops in prices paid.

Solar, Wind

“One thing that’s been of interest over the last several years is wind and solar, and obviously that’s not going way,” Worrell said.

“Fifty-three percent of respondents said they had entered into a wind energy agreement during he first half of 2025. That was 34% two years ago. So, that’s a pretty substantial jump in two years.”

Of those who managed farmland, 26% had a farm enter into a solar energy agreement during the first half of this year, compared to 31% two years ago.

The midyear survey also found that 57% of respondents who transact farmland had a farm sold that had an ongoing wind or solar contract.

Of those, 63% indicated that the wind or solar contracts made the farm more attractive, with the remainder indicating there was no impact from the wind or solar contract.

Foreign Ownership

“We don’t dive into the specifics on foreign ownership. (University of Illinois agricultural economist) Bruce Sherrick recently did a study, and the amount of acres is actually very small,” Worrell said.

“I was surprised to see that 15% (foreign investors) on our survey,” he said. “Typically, if we do hear from foreign investors, I know everybody’s mind immediately goes to China, but truthfully I’ve never seen that and most of my colleagues haven’t seen that either.

“If we get calls from someone who would be a consider foreign investor, it almost always is Canada or South America, but overall it’s a small amount of acres.”

Cash Rents

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 Agreements

Respondents indicated the following use of alternative farmland leases:

• 21% are share-rent leases.

• 14% were modified share-rent leases.

• 25% are cash-rent leases.

• 34% are variable cash-rent leases.

• 6% 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% of variable cash rents have a base rent that is paid regardless of prices, yields, or incomes.

• 77% have a payment if revenue exceeds specified levels.

• 6% have a payment based on price.

• 6% have a payment based on yield.

• 14% have costs of production enter the calculations of rent.

Farm yields are used in 91% 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. Fifty-nine percent of leases use multiple prices at a local delivery point, 34% use futures prices and 6% use one price at a delivery point.

Crop insurance and/or government payments are used to calculate rent payments in 31% of the leases.

When gross revenue is used to calculate a bonus, the average percentage is 35% for corn and 39% for soybeans.

Lease Performance

Most respondents are satisfied with the performance of variable cash leases:

• 50% were very satisfied.

• 47% were satisfied.

• 3% were dissatisfied.

Most respondents are also satisfied with the performance of variable cash leases:

• 43% were very satisfied.

• 50% were satisfied.

• 6% were neutral.

The majority indicate that variable cash-rent arrangements make negotiations easier as compared to fixed cash-rent arrangements:

• 25% indicated negotiations were much easier.

• 58% indicated negotiations were somewhat easier.

• 12% indicated negotiations were about the same.

• 3% indicated negotiations were harder.

Most respondents said that lease terms do not change every year, with 66% indicating changes occur periodically and 28% indicating that lease terms seldom change.

Of the remaining 6%, half stated that changes occur every other year and half said that some terms change annually.

The larger, more in-depth Farmland Values and Lease Trends Report for 2025 will be released on April 2 at the Illinois Farmland Values Conference in Bloomington.