BLOOMINGTON – Unprecedented charts the land market through 2021 and into 2022.

“We ended 2021 incredibly strong with lots of action and sit here at the start of 2022 trying to decipher where the mad rush will end,” said Luke Worrell, AFM, ALC, Worrell Land Services and Chairman of Land Values ​​Conference held in Bloomington on Thursday. .

The annual event was sponsored by the Illinois Society of Professional Farm Managers and Rural Appraisers.

Citing increases paid for farmland as high as 26% from a year ago, Worrell says statewide we’ve seen skyrocketing price increases across all land classifications.

Topping the list were Class A or “Excellent” acreage, which jumped 26%. It’s a number that may take your breath away, but across the state, areas with Class A farmland have seen a 30% increase from two years ago.

Worrell notes that the dramatic increases didn’t end with Class A acreage.

“Classifications of lower land categories like Good have increased by 24%. The average agricultural area has increased by more than 20%. Even fair-trade land increased by 5% and recreational or mixed-use properties increased significantly in some pockets of the state.

Worrell noted that many producers have been able to sell their 2021 grain for nearly 50% more than they did with their 2020 grain. Additionally, interest rates are still historically low. Borrowing capacity is strong and there are also many cash buyers. Historically speaking, the earth can be very bullish in times of troubling turbulence, as many view it as a hedge against inflation.

Cash rents are also up according to Gary Schnitkey of the University of Illinois, who shares the podium with Worrell.

“The mid-year survey we conducted last August predicted an average increase in rental costs of 12%, but our year-end figures show that a figure closer to 20% is what ended up by happening more frequently than not,” Schnitkey said.

He explained that cash rents per acre for 2022 for prime farmland range from $400 at the top end to $300 in the bottom third. Those same ranges for good land range from $360 at the top to $250 at the bottom third. Average farmland ranges from $300 high to $215 low. Fair land ranges from $250 per acre to $160.

“There are two types of cash leases – traditional and variable,” says Schnitkey. “Under a traditional lease, a fixed amount of cash rent is negotiated between the landowner and the tenant, usually at the start of the crop year.

“As part of a variable lease, the amount of the compensation depends on the turnover. A typical variable lease has a fixed base payment and then a “bonus” payment.

The premium payment is a percentage of gross income when gross income exceeds a specified level. In 2022, traditional crop sharing agreements will account for 28% of leases, while variable cash leases will account for 36% of leases.

“Operations managers typically use short-term leases for cash leases. Of the cash rents, 81% of the leases were for a one-year term,” he noted.

The full 124-page report on farmland values ​​and lease trends in 2022 is available for purchase for $15 a copy at www.ispfmra.org. The summary presentation made during the conference is also there for public consultation.