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News from the Illinois Valley

the price of farmland

Posted by wlpo on December 5, 2010

There’s very few commodities holding their own in this recession – and farmland is one of them. Gary Schnitkey, University of Illinois professor, says lower returns and high interest rates hurt farmland prices prior to 1986. Since then, farmland prices have steadily increased –seeing 15% jumps in 2004 and 2008. Much of that increase was due to people moving out of Chicago and to 1031 exchanges, according to Schnitkey.  When that ended, Schnitkey says prices surprisingly held steady due to commodity prices sprinting upwards followed by cash rents. Higher interest rates could be one factor to take land prices down in the future, says Schnitkey. USDA numbers indicate an acre of farmland was pretty steady in the last three years around $4725 an acre. 

 

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