The average farm real estate value for Illinois in 2008 is $5,000/acre, according to a new University of Illinois Extension study.

“This is the highest value on record,” states Dale Lattz, University of Illinois Extension farm financial management specialist. He prepared the analysis based on data from USDA’s National Agricultural Statistics Service.

“Fourth Year in a Row of Double-Digit Increases for Illinois Farm Real Estate Values,” is available on U of I’s Extension farmdoc Web site.

“The $5,000/acre figure includes the value of all land and buildings,” says Lattz. “The figure is 15.5% higher than the 2007 average of $4,330/acre. This increase marks the fourth year in a row of double-digit increases.

“The 2005 value increased 27.6%, the 2006 value increased 14.1% and the 2007 value increased 13.9%. The 2008 percent increase was the second highest since 1977.”

Farm real estate values in Illinois have increased 121% since 2000, adds Lattz. And farmland values have shown a year-over-year increase every year since 1988.

The current strength in farmland values appears to be driven by higher corn and soybean prices and expectations that those prices will remain high due to strong demand, concludes Lattz.