The average cost of Illinois farmland has reached $5,000 per acre for the first time after four straight years of double-digit price increases.

The figure includes the value of land and buildings and is based on an annual U.S. Department of Agriculture survey of farmers.

“Commodity prices have been cited as the main factor. The earnings from farms are driving the land prices,” said Dale Lattz of the University of Illinois Department of Agricultural and Consumer Economics.

The $5,000 average for 2008 was up 15.5 percent from 2007. It also was the biggest year-to-year increase since 1977. Farm real-estate values have been up every year since 1988, according to the USDA report.

Lattz said factors other than crop prices are contributing to farmland investments, including the weak stock market, but the trend now shows signs of slowing.

“I think they’ve (USDA) been a little behind. ... Depending on where you are, we may be peaking in another year or two,” Lattz said.

While rising land values are good for established farmers, Lattz said higher prices make it harder to break into the business.

“It makes it difficult for the younger ones if you’re somebody who has to come up with a pretty large down payment,” he said.

Tim Landis can be reached at 788-1536.

Price of land

Average Illinois farmland values and percentage increase 1998-2008

1998: $2,130; 7.6
1999: $2,220; 4.2
2000: $2,260; 1.8
2001: $2,290; 1.3
2002: $2,350; 2.6
2003: $2,430; 3.4
2004: $2,610; 7.4
2005: $3,330; 27.6
2006: $3,800; 14.1
2007: $4,330; 13.9
2008: $5,000; 15.5

Source: U.S. Department of Agriculture, National Agricultural Statistics Service