Farm Prices: What Happened in 2014
By Matthew Roberts, Certified General Real Estate Appraiser
Did the Farm Frenzy Fizzle Out?
Over the past few years, farm prices for tillable farmland have increased substantially. However, in 2014, the farm frenzy seemed to fizzle out. Throughout the year, many speculated that farm prices had leveled off or even declined. Some very big changes happened in the farm market last year, but concluding what actually took place may be something that is disputed long into 2015.
Farm Price Trends in Illinois and Missouri
To give you some idea of farm market trends, I have analyzed sales from Adams and Hancock Counties in Illinois and from Lewis and Clark Counties in Missouri. Price per acre of tillable cropland farms tends to be higher in Illinois, but the change in farm prices on each side of the river moved in the same direction. From 2012 to 2013, in Adams and Hancock, the average farm price per acre of farmland and tillable land types increased by 15% to 30%! Comparing 2013 to 2014 indicated very different results. Average prices actually showed a decrease of 7%-12%. From 2012 to 2013, in Lewis and Clark, the average farm price per acre of farmland increased anywhere from 3% to 10%. From 2013 to 2014, average prices decreased by 2%-7%.
Farm Prices | 2014
What Happened to Prices
Range of change in average price per acre, by area. Both sides of the river moved together.
Adams & Hancock, IL
Lewis & Clark, MO
−10%
0%
+10%
+20%
+30%
+15% to +30%
−7% to −12%
+3% to +10%
−2% to −7%
2012→13
2013→14
2012→13
2013→14
Farm · Commercial · Home appraisals | Missouri · Illinois · Iowa
Fewer Sales of High-Quality Farmland
But at the same time, another trend began in the farm market which may have dramatically affected average farmland prices. The big change between 2013 and 2014 was the number of farm sales. The number of farm sales was much lower in 2014 than previous years. Not only that, there were far fewer sales of the highly productive farmland than in 2013. Comparing 2014 to the previous year, on both sides of the river, showed that there were as many as 50% to 80% fewer farm sales of high quality tillable land types. Having fewer sales of the highest quality farmland in 2014 may have resulted in downward pressure on average farmland prices. Regarding the notion that the market for farmland had ‘fallen off,’ 2014 may not have been the year. It seems that last year, prices did not necessarily decrease, but there were fewer sales of high quality farms. When these types of farms did sell in 2014, their sale prices were still strong. Taking this into consideration, farm prices could possibly be relatively stable.
Farm Prices | 2014
Why the Averages Fell
Prices did not necessarily decrease. The mix of sales changed.
Far Fewer Top‑Quality Sales
As many as 50% to 80% fewer sales of high‑quality tillable land on both sides of the river.
Averages Pulled Down
Fewer of the highest‑quality farms in the mix may have put downward pressure on average prices.
Top Farms Still Sold Strong
When high‑quality farms did sell in 2014, their sale prices were still strong.
Possibly Relatively Stable
2014 may not have been the year the farmland market “fell off.”
Farm · Commercial · Home appraisals | Missouri · Illinois · Iowa
Market Trends and Accurate Farm Appraisals5
Understanding various farm market trends can greatly contribute to an accurate farm appraisal of agricultural properties. At Spurgeon Appraisals, our customers are familiar with our professional level of detail and analysis in our reports. We are well qualified and equipped to meet your farm appraisal needs.
Spurgeon Appraisals regularly appraises a variety of property types. We have experience appraising farms, residences, and commercial properties. We pride ourselves on providing excellent customer service and quality appraisals. Contact our team to see how we can meet your appraisal needs and exceed your service expectations.
