Lower returns to rented land and higher interest rates began signaling the potential for falling farmland prices in 2023.
Farmdoc from the University of Illinois says those signals are continuing, with the current fundamentals suggesting land value reductions of approximately three percent in 2025. A three percent drop would be in line with observed adjustments since the 1980s as well as expectations from professional farm managers who were surveyed this year.
On the other hand, there are valid arguments supporting continued strength in farmland prices. For example, the average cash rent in Illinois was $269 per acre in 2024, an increase of ten dollars an acre, or 3.9 percent, from 2023. Average Illinois cash rents have risen by 21 percent since 2020 after a period of relative stability from 2015 to 2020. The average Illinois land values this year followed the same trend, rising almost three percent (2.7) from 2023.
(From the National Association of Farm Broadcasters)