Illinois farmland values up 18 percent over 2010 - Quincy Herald-Whig | Illinois & Missouri News, Sports

Illinois farmland values up 18 percent over 2010

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By DEBORAH GERTZ HUSAR

Herald-Whig Staff Writer

Although home values have gone down, the value of Illinois farmland is up by 18 percent.

According to the U.S. Department of Agriculture, the price of Illinois farmland averaged $5,800 per acre in 2011, an increase of 18 percent over the 2010 level of $4,900.

"The 2011 increase continues a string of large increases that began in 2004," said Gary Schnitkey, University of Illinois agricultural economist and farm management specialist. "Since 2004, Illinois farmland prices have increased by 222 percent. Or another, way of putting it, farmland is 2.2 times higher in 2011 than in 2004."

The average cash rent in Illinois was $183 per acre in 2011, an increase of 8 percent over the 2010 level of $169 per acre and 45 percent higher than the 2004 rent.

Historically speaking, Schnitkey said the last time farmland price exceeded capitalized value by a large margin was in the early 1980s, immediately prior to the large decline in Illinois farmland prices that occurred from 1982 through 1987.

"Currently, the situation in 2011 is not like the 1980s. This suggests that either farmland returns have to decrease or interest rates have to increase before farmland prices fall," he said.

But with economic data suggesting sluggish growth and raising the possibility of a double-dip recession, farmland remains attractive to investors.

"The threat of inflation in the future places pressure on farmland prices as farmland and other real assets are perceived as safer stores of wealth than financial assets during inflationary times. The threat of long-run instability places a premium on real assets over financial assets. This suggests that a more stable general economic outlook would lead to less aggressive growth in farmland prices."

Schnitkey's full evaluation of farmland values is available online at farmdoc.illinois.edu/manage/newsletters/fefo11_15/fefo11_15.html.

Boosting soybean yield

When it comes to corn and soybean yields, corn long has had the edge, but a new effort by the soybean checkoff aims to even the score by boosting yields and, in turn, the value of every acre planted to soybeans in the U.S.

The United Soybean Board recently committed $3.5 million for research to identify and evaluate soybean genes that increase yields. The ultimate goal is to increase soybeans' national yield average from the current 43.6 bushels per acre to 59.5 bushels per acre by 2030. This would not only increase the profit potential of U.S. soybean farmers but also help meet increasing global demand for food, feed, fiber and fuel.

"Soybean yields need to increase to get as close to corn as possible in order to prevent losing acres to corn and to ensure U.S. soybean farmers continue to meet the increasing global demand for soy," said David Hartke, a USB farmer-director and member of the checkoff's production research program.

The three-year research project will be conducted by land-grant university researchers throughout the soybean-growing region of the United States, including researchers at the National Soybean Research Laboratory at the University of Illinois and researchers at Southern Illinois University-Carbondale. Pending full approval by the U.S. Department of Agriculture's Agricultural Marketing Service, researchers involved in the task of identifying and evaluating yield genes will begin work this fall.

 

 

 

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