Summer Farmland Values Update 2021
By First Mid Ag Services Designated Managing Broker and Auctioneer, David Klein
As July comes to a close, land prices across 
the Midwest continue to trend upwards. Most of the growth and upward trend continues to be most prevalent in the limited number of auction sales, but some private treaty listings are following those auctions with high closing prices of their own in high percentage tillable, high soil productivity, high percentage recently tiled farms. First Mid Ag Services has two farmland auctions scheduled in August and several more for late October, November and December planned after harvest. With auction prices continuing to set the precedent, if you are considering selling your farmland, an auction, either before or after harvest seems to be the truest way right now to determine the market price for your farm. While high quality tillable land continues to see the greatest increase, we are also realizing increases across all categories (timber, recreational, development, pasture, transitional, etc.).
The land market continues to surge primarily due to real interest rates returning to all time low levels, as well as commodity prices rebounding to over $5.50 corn and $14.50 beans. Farmland loan rates are very attractive again. Alternative interest earning options make the nominal cash return on farmland look attractive. Anywhere that can be boosted, tends to add value to the land. In national news, drought continues to be a concern particularly for the Dakotas, Western United States and parts of Canada. Proposed changes in tax laws are stirring discussion about selling now to potentially limit capital gains tax exposure for some long-time farmland owners. Also in national news, the nominee to the chair of Undersecretary of Agriculture voiced support of expanding Crop Insurance, Carbon Credit Commodities, & CRP Enrollment. In relation to the land market, farmland owners and operators should keep an eye out for increased CRP incentives on farms that would qualify in order to meet the proposed “30x30 plan”, a proposed plan to conserve 30% of the nation’s marginal land by the year 2030. If this would come about it would take some marginal land out of production, which could be supportive to grain prices and higher quality farmland values.
This fall could be a very busy period for farmland transactions. If you are interested in selling land, it is important to begin the process this summer to provide adequate time to properly bring a farm to the market. Contact us at 800-532-LAND or any of our offices in Kankakee (Bourbonnais), Bloomington, Peoria, Mattoon, Decatur or Springfield with our individual real estate brokers positioned near your land to assist you with their local expertise.
