Each year the National Agricultural Statistics Service of the USDA releases estimated average farm real estate values and cropland values by state. The estimates are based on surveys of farmers from selected geographical areas. The surveys follow strict statistical guidelines. Estimated values may be revised the following year based on additional information. Revisions may also be made based on data from the 5-year Census of Agriculture. The methodology and timing of the study has changed over time, but the statistical information provides some insight as to the changes in farm real estate values from year to year.
The farm real estate value data is used to construct index numbers of Illinois farmland values. The index below can also be found at the farmdoc website: https://farmdoc.illinois.edu/handbook/index-numbers-of-illinois-farmland-values. This index can be used to estimate a current or past value using purchase price or appraisal. The 2021 index value (using 1979=100) is 425 when using the Illinois Farm Real Estate Value of $7,900. This value includes the value of cropland and farm buildings.
Detailed instructions on how to use the index can be found below. In addition to this index, excel tools that do the calculation for you can be found https://farmland.illinois.edu/tools-and-data/. In addition, you can use a cropland index tool there as well.
How to Use Index Numbers of Illinois Farmland Values
- Index numbers can be used to estimate what farmland values were in past years. Some people use this to establish a basis in farmland.
To estimate farmland values from past years use the following formula:Current land value X Past year’s index Current year’s index
Example: Current land values are $13,000 per acre. What was the value of this land in 1975?$13,000 X 45.5 (1975 index value) 425 (2021 index value) Equals $1,392 per acre.
- Index numbers can be used to estimate current values of farmland.
To estimate farmland values from past years use the following formula:Past land value X Current year’s index Past year’s index
Example: I paid $1,200 per acre for land in 1975. What is an estimated value of this land today?$1,200 X 425 (2021 index value) 45.5 (1975 index value) Equals $11,209 per acre.
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