Tidbits from farmland values report

BLOOMINGTON, Ill. — The Illinois Society of Professional Farm Managers and Rural Appraisers’ comprehensive annual farmland values report also includes various tidbits of interest.

Here are other notes of interest from each of the state’s 10 crop reporting districts.

Region 1: Northeast

A big topic of discussion was the One Big Beautiful Bill Act and the lack of a new farm bill. The main changes come in the forms of increased reference prices for Agriculture Risk Coverage and Price Loss Coverage programs and the increase in crop insurance subsidy. These changes will also make bolt-on insurance products attractive to farmers.

While farmers are grateful to receive some assistance such as the Farmer Bridge Assistance program and the Emergency Commodity Assistance Program payments in 2025 in this economic environment, they would rather see better commodity prices and solutions to the problems.

The payments are easier to negotiate leases and keep rates the same. Without assistance, rates would be pressured to go much lower.

One area that was gaining traction was carbon programs and conservation programs tied to related practices. The only new development on this front happened when the state released a program that paid farmers for three years to implement and maintain practices related to no-till and strip-till farming. No other programs have emerged and some earlier pilot programs have faded away.

Region 2: Northwest

While the region experienced a noticeable decline in real estate transactions compared to previous years, the end of the year typically sees an uptick in auction activity. These end-of-year auctions help guide the farmland market for the upcoming year.

The demand for farmland remains strong due to limited alternative investment opportunities. Farmers continue to show interest in expanding their operations, and premiums are still being paid for land adjacent to or near existing operations. Investors also remain active market participants.

Region 3: Western

Wind energy development activity remains ongoing, with several projects currently in various stages of development in Stark and Knox counties.

A portion of higher-end cash rents were adjusted downward — by as much as 10% in some cases — or transitioned to flex arrangements.

Resistance remains among some long-term landowners to shifting to straight cash rent or cash rent with flex terms, as many continue to favor share-crop arrangements.

During lease negotiations, tenants have become increasingly focused on break-even levels, as margins across the industry continue to be pressured by elevated input costs.

Region 4: North Central

This area also contains abundant wind energy opportunities as some of the “best wind” at 50 to 80 meters high exists in this region of the state. There continues to be more wind projects and solar projects coming to Region 4.

With Midcontinent Independent System Operator upgrading its infrastructure and adding capacity, there will be more solar and wind developed in Region 4. In McLean, Mason, Tazewell and Livingston counties, solar projects are in the developmental stages.

There have been carbon sequestration leases recorded in eastern McLean County. These leases have come in the past few years so there is not much known about how this will affect land values, and they are all in the development term of the lease still.

In any case, it seems safe to conclude that the “green energy” movement has affected the landowners’ bottom line in a positive way.

Region 5: Eastern

Overall, rents in our region are steady-to-down 5% going into 2026. Without relief from high crop input costs or improvement in commodity prices, lower rents would be anticipated in 2027.

Operators vary in their opinion about federal support programs and how or whether they should be factored into rents on cash leases. Few decline payments though, whether landowner or operator.

One Big Beautiful Bill Act’s increase in Enhanced Coverage Option subsidies will be very helpful in providing better revenue protections at reasonable costs.

Concerns about service at local U.S. Department of Agriculture offices are surfacing after staff reductions in many locations.

Region 6: Central

Decreases to cash-rent agreements should be considered due to the lower profitability. Reductions in fertilizer rates have been discussed on all leases as operators and direct owners are looking for ways to increase margins in 2026 with a fairly stagnant grain market.

It would not be surprising to see some landowners shift away from flex-rent leases to more fixed-rent agreements to guarantee income throughout the instability in the marketplace. Yields in 2025 were good but not record-breaking, thus leading to decreased profitability.

The continuation of trade wars is taking a toll. The Trump administration continues to push forward and support the countryside through government payments, but time will tell how these impacts will continue to affect producers and Illinois landowners.

Region 7: West Central

There have been multiple solar companies trying to get projects off the ground in the area. There are a couple that sound promising to be developed, but nothing new has broken ground yet this year.

Farmers tend to have negative views on green energy and its impact on lease rates. Operators that sign up their own ground for green energy typically have more capital to go and purchase or lease more farmland.

Therefore, the more green projects that get developed in an area will most likely lead to higher cash-rent rates for that area.

The developers that ISPFMRA has talked to complain about grid availability and capacity as their limiting factor in getting many of these projects off the ground.

Region 8: Southwest

The population in the St. Louis metropolitan area provides a strong economic engine for the economy of the region and has a positive influence on land values depending on location.

With a large population base within easy driving distance, recreational land has traditionally been in high demand in Region 8.

When farms become available to rent, some farmers opt to submit a cash-rent bid with a bonus clause. Some larger operators continue to submit aggressive high bids without bonuses.

Feeling the pinch of a couple of lean years in a row, operators are becoming less aggressive when bidding for cash-rent leases. Some operators are willing to break even in the short term with hopes of profits in the future.

Region 9: Southeast

Construction on several solar farms has begun in the region, and there are still companies soliciting more acres to lease for either wind or solar development.

As farmers lose either rented or owned land to solar and wind development, will the farmer try to replace those lost acres through buying different farms or paying a higher cash-rent rate?

The question is will the increased revenue in a local market have an impact on the local land sales or rental rates?

As stated in last year’s report, it is still too early to know. It may also be difficult to have sufficient data to prove the theory either true or false on what the impact will be.

Region 10: Southern

Producers across southern Illinois experienced weaker commodity prices during the 2025 growing season, compounded by varying degrees of drought stress.

While these factors have tightened margins, most operators have not reduced their rent offers, nor have they backed away from opportunities to acquire additional acreage.

Solar development continues to present both a challenge and an opportunity for farm operators across Region 10, similar to the prior years.

More producers report receiving lease-option offers that include annual payments during the initial option period, which differs from previous years where solar companies typically sought option agreements without providing upfront compensation.