
August 27, 2003 
FEFO 03-15
A HISTORIC LOOK AT ILLINOIS FARM REAL ESTATE VALUES
Each year the National Agricultural Statistics Service of the USDA
releases estimated average farm real estate values and cash rents
by state. The estimates are based on surveys of farmers from selected
geographical areas. The surveys follow strict statistical guidelines.
Estimated values maybe revised the following year based on additional
information. Revisions may also be made based on data from the 5-year
Census of Agriculture. The methodology and timing of the study has
changed over time but the statistical information provides some
insight as to the changes in farm real estate values from year to
year.
AVERAGE ILLINOIS FARM REAL ESTATE VALUE
The average Illinois farm real estate values
from 1970 through 2003 are listed in Table 1 and graphically in
Figure 1. The average farm real estate value for Illinois in 2003
was $2,770 per acre, the highest on record. This includes the value
of all land and buildings. The figure was 4.9 percent higher than
the 2002 average of $2,640 per acre. Farm real estate values have
shown a year over year increase every year since 1988, or sixteen
consecutive years. Since 1999, farm real estate values have increased
23 percent.
Since 1970, average farm real estate values have
declined only five times as compared to the previous year. Those
years were 1982, 1983, 1985, 1986 and 1987. The largest decline
recorded was in 1985, when farm real estate values dropped 25.1
percent compared to 1984. There have been three years when farm
real estate values increased over 20 percent, in 1974, 1976 and
1977. The largest increase was in 1977 when values rose 37.3 percent.
Since 1990, farm real estate values have recorded
a steady upward increase. The largest increase during that time
was a 9 percent increase recorded in 1995. The smallest was a .8%
increase in 1993. Low interest rates, low returns on alternative
investments and continued use of farmland for developmental purposes
have been the main drivers pushing up farm real estate values. These
factors seem to have a bigger influence on farm land values than
the actual earnings from farm land.
The farm real estate value data is used to construct
index numbers of Illinois farmland values. The index can be found
at the farmdoc website. http://www.farmdoc.uiuc.edu/manage/land_value.asp


Figure 1. Average Illinois Farm Real Estate
Values per Acre, 1970 through 2003.
Issued by: Dale Lattz,
Department of Agricultural and Consumer Economics
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