DECATUR, Ill. — Farmland values in Illinois dipped slightly in the months of January-June, responding to lower commodity price trends. This is reflective of a year-over-year trend in declining Illinois farmland values that has seen values fall by as much as 10 percent, according to Luke Worrell of the Illinois Society of Farm Managers and Rural Appraisers (ISFMRA), who summarized data from their Mid-Year Snapshot Survey of farmland prices at the Farm Progress Show media tent on Wednesday, August 27.

“What we did see is probably not that surprising to those who follow the industry; we saw a modest decrease in land values,” said Worrell, of Worrell Land Services in Jacksonville, Ill. 

Of the respondents, 31 percent indicated no changes in prices being paid, while the balance reported the following declines: minus 2.2 percent for excellent quality farmland, minus 3.5 percent for both good and average quality land, and 3 percent for fair quality land. 

“If you put that on top of what our 2024 research showed, land values are down between 7 and 10 percent from the beginning of 2024 as an average,” Worrell said. “Farmers are still the predominant owners-operators, with 61 percent; 17 percent were local investors, 10 percent non-local investors, 10 percent institutional investors and 2 percent other. What I found interesting is this is almost verbatim identical to the demographics we recorded last summer.”

As for land sales, estate sales, at 61 percent, comprised the bulk of transactions, while 11 percent of sales were to local investors. Ten percent of sales went to farmers, while the balance was made of non-local investors, institutional investors and others. 

“Around 4 percent of sales were to institutional investors,” according to the ISFMRA spokesman. “We asked who had worked with an institutional investor, and this year 32 percent (of farm managers and appraisers) said they had. When we asked this question last year it was 24 percent. Interestingly, two years ago it was 37 percent.”

Fifteen percent of non-local investor sales involved foreign buyers, the survey revealed. Virtually none of these sales involved Chinese investors or the Chinese government, according to Worrell. 

“The question of foreign ownership is kind of a hot topic. We don’t dive into specifics, but the amount of acres is quite small,” Worrell said, in response to a question from a Farm World correspondent about how much farmland in Illinois is Chinese-owned. “Personally, I have been doing this for a very long time and have not been involved in a single (sale of farmland to a Chinese buyer). I can say that typically if we do hear from foreign investors, we almost always hear from buyers from Canada or South America.”

The Mid-Year Snapshot Survey asked for the first time whether practitioners had handled sales involving farmers facing financial difficulties during the first half of 2025, to which 11 percent responded in the affirmative. “We thought this question would be interesting given the agricultural economy right now,” said Worrell. “In retrospect, we wish we would have asked that question last year, so stay tuned as we will likely make that a data point for the next couple of years.”

Most respondents indicated they expect farmland values to remain the same or decrease over the rest of the year, with 49 percent expecting a decline of less than 3 percent, 33 percent expecting prices to hold steady, and 18 percent anticipating a 3-plus percent decline. “I think a good indicator here is that virtually no one expects a rise in values in the second half of 2025,” commented Worrel. 

Drivers behind land sales in the first half of 2025 included lower farm income related to lower commodity prices, placing the potential for a financial return under duress, he added. Other drivers include competition for investment dollars and returns now that farmland is decreasing in value. 

Average farmland cash rents, after increasing from 2020-2023, have fallen two consecutive years, the survey revealed. Survey respondents indicated they expect farmland lease values to continue to erode by as much as $15-$20 per acre in 2026. “This is around a 4 to 7 percent decline, which is a little bit wider than what the survey expectations were last year,” said Worrell.  “We asked what people believe commodities will be marketed for in the second half, and that came in at $3.95 for corn and $9.95 for beans. That is almost exactly like what last year’s expectations were.”

Thirty-four percent of lease agreements are now variable, or flex, cash rental arrangements, a trend that is also expected to continue. “Twenty-five percent are cash rents, 21 percent are shared rents, 14 percent are modified shared rents and 6 percent are custom.”

Digging deeper into variable cash rent arrangements, 25 percent indicated that negotiations were much easier than with fixed or other types of lease agreements. Fifty-eight percent indicated that negotiations were somewhat easier, while 12 percent said they were about the same. Only 3 percent said negotiations were more difficult. 

A majority, 76 percent, of farm managers and appraisers expect lower interest rates in the second half of 2025. The survey, conducted by Gary W. Schnitkey from the University of Illinois, served as a follow-up to ISFMRA’s larger Farmland Values and Lease Trends project issued earlier in 2025. Over 70 practitioners throughout Illinois responded to the Mid-Year Snapshot Survey, according to Worrell. 

You can download the entire ISFMRA 2025 Mid-Year Snapshot Survey at https://ispfmra.org/.