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

"This is the highest value on record," says Dale Lattz, University of Illinois Extension farm financial management specialist who prepared the report based on data from the USDA's National Agricultural Statistics Service.

The full report, "Fourth Year in a Row of Double-Digit Increases for Illinois Farm Real Estate Values," is available on U of I Extension's farmdoc website.

"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."

Lattz notes that farm real estate values have shown a year-over-year increase every year since 1988, or 21 consecutive years.

"Since 2000, Illinois farm real estate values have increased 121%," he says.

Lattz says the current strength in farmland values appears to be driven by higher corn and soybean prices and the expectation that those prices will remain high due to strong demand.