URBANA — Illinois farmland values are continuing to rise but at a slower rate than in 2011, according to a mid-year survey by the Illinois Society of Professional Farm Managers and Rural Appraisers.
"Overall, land values increased by 5 percent during the first half of 2012," said Don McCabe, chairman of the Illinois Land Values project conducted by the society and the University of Illinois.
"This is less than the double-digit increases we've seen the past few years," said McCabe, president of Soy Capital Ag Services.
In 2011, Illinois farmland prices jumped about 20 percent on average, according to the society's annual land values survey released earlier this year.
The mid-year survey of society members found that 75 percent of respondents believe this year's drought will have no impact on farmland prices.
Respondents indicated that few 2012 cash rents will be reduced as a result of the drought. Seventy-seven percent said they expect the drought to have no impact on 2013 cash rents.
There still seems to be strong demand for "excellent-quality" farmland, which normally yields more than 190 bushels of corn per acre.
On July 1, the average price for excellent-quality farmland was $11,200 an acre, according to the mid-year survey.
In last year's mid-year survey, the price of excellent-quality farmland topped $10,000 an acre for the first time.
This year, the average price for "good-quality" farmland — which normally yields 170 to 190 bushels of corn per acre — was $9,200 an acre.
"Average-quality" farmland, which normally yields 150 to 170 bushels per acre, tended to sell for about $7,800 an acre.
"Fair-quality" land, which normally yields less than 150 bushels an acre, had an average price of $5,900 an acre.
Of course, this wasn't a "normal" year due to the drought. Respondents said they expect this year's corn yields to be 44 percent lower than expected and soybean yields to be 30 percent lower than expected.
The volume of Illinois farmland sold during the first half of 2012 was down slightly from a year earlier, according to the mid-year survey.
But most respondents said they expect sales volume during the second half of the year to be at last year's level or greater, McCabe said.
Forty percent said they expect the volume to be higher, while 42 percent said they look for it to be the same.
The survey was tabulated and its results summarized by Gary Schnitkey, professor and farm management specialist in the Department of Agricultural and Consumer Economics at the University of Illinois.