The sale of more than 3,900 acres of central Illinois farmland — covering seven square miles and parts of four townships — is expected by organizers to draw a crowd of 700 to 1,000 bidders and the merely curious to Springfield next week.
Farmers, too.
“What we have is a phenomena where we have lots of people in the upper crust, top 20 percent of the country finance-wise, who are experiencing something that they’ve never experienced the last two or three years. It’s kind of an ‘in’ thing now to have farmland in your investment portfolio,” said Mac Boyd, immediate past president of the Illinois Society of Farm Managers and Rural Appraisers.
The sale of land from the Kilton Farm near Litchfield, about 50 miles south of Springfield, has generated industry buzz well beyond the state, including with investment firms, real estate companies and corporate farms, Boyd added.
“If they’re in the land business, they know about it,” he said.
Aumann Auctions Inc. of Nokomis will conduct the sale of land from the Kilton family trust on Wednesday at the Crowne Plaza in Springfield. Auction co-manager Kent Aumann explained that there was no place large enough in the Litchfield-Carlinville area to accommodate the anticipated crowd.
“There’s a lot of interest with that many acres. There’s some corporate farms and what you might call investment types,” said Aumann.
As philosopher/humorist Will Rogers is often quoted: “Buy land. They ain’t making any more of the stuff.”
Farmland values followed corn and soybeans to record highs in 2008. The average in Illinois hit $5,000 an acre for the first time, according to an annual survey from the U.S. Department of Agriculture. The Sangamon County average was $5,500 an acre, based on the same report.
University of Illinois farm economist Dale Lattz said the recession probably has slowed the double-digit increases of the last three years, but he noted there are no signs quality farm ground is about to go the way of housing prices.
“The general feeling is that farmland values are off from the top of what happened in the summer and fall, but that they were still up for the year,” said Lattz.
Earl Sorrells of Sorrells Elevator & Brokerage at Raymond said speculation locally is that the Kilton land, which has rotated between corn and soybeans, will bring $6,400 to $7,000 per acre. He added that some local investors may try to group bids.
“It will be a test of the land market. The (falling) grain prices are scaring people. Down the road, land may get cheaper. My observation is that when industry and commercial interests are on the low end, farming is on the high end,” said Sorrells, who plans to attend Wednesday’s auction.
Farmland owner Larry Fesser also is a board member at First Community Bank in Hillsboro. Fesser, too, said the impending land sale has been the talk of the community, adding that “anything is possible.”
“Some think the funds will come out of New York. I think the crowd will be large,” he said.
While it’s always difficult to guess what land will bring at auction, Boyd said, tillable central Illinois farmland was selling for as high as $9,000 an acre as recently as last fall. He added that farmers have learned to compete for land by forming partnerships with outside investors.
“The powerful farmers are getting people interested in land, which isn’t as hard as it use to be. They own the land, but the farmer farms it,” said Boyd, who also hopes to attend the auction.
“There’ll be some big players there,” he said.
The state appraisal group plans to release an update of Illinois farmland prices in March, but executive director Carroll Merry said there is plenty of anecdotal evidence that the collapse on Wall Street has enticed some investors to take a look at Midwest soil.
“It’s not glamorous or romantic to say I invested X in farmland, but as an investment, it usually offers pretty solid returns,” he said.
Correspondent Nancy Slepicka contributed to this report. Tim Landis can be reached at 788-1536.
Soaring value
Here are the average farmland values in Illinois from 2000 to 2008 and the percent change from previous year:
| Year |
Value (per acre) |
Change |
| 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% |
Sources: U.S. Department of Agriculture and the Illinois Society of Farm Managers and Rural Appraisers
