CHAMPAIGN, Ill. — A June farm sale in McDonough County serves as an example of how things have changed for land values in Illinois, according to the head of the auction company that sold the property.

The 334-acre farm sold June 23 for $11,482 per acre, or $3.835 million, said Murray Wise, CEO of Murray Wise Associates. McDonough County is in west-central Illinois.

“A year earlier, the farm would have brought $700 to $1,500 more an acre,” Wise noted. “It’s a direct reflection of lower cash income and the pressure from commodity prices.

“Cash rents are under some pressure, income is under some pressure and that puts land values under pressure. I don’t think it’s unexpected (to see lower values). It’s Economics 101, as pressures occur on farm incomes.”

He doesn’t see things changing in the next year or so. “The global grain inventory is expected to grow in the next 18 months,” he said. “I can’t see $5 corn or $13 to $14 beans anytime soon. In the next year, we’ll see some real pressures and I think that can’t help but translate to lower (land) values.”

A report on land values released earlier this year by the Illinois Society of Professional Farm Managers and Rural Appraisers said farmland prices are expected to decline this year and possibly for the next five years. Respondents to a survey conducted by the organization said values for excellent land statewide dropped 1 percent during 2014, from $12,900 at the beginning of the year to $12,800 at year’s end.

Prices for good land fell 3 percent, from $10,800 to $10,500. Land deemed average dipped 2 percent, from $8,700 to $8,500. Fair land also decreased 2 percent, from $6,600 to $6,500.

“In year 2014, Mother Nature blessed Illinois agriculture with record crop production which caused declining commodity prices,” said Dale E. Aupperle, general chair of the 2015 survey. “Yes, most farm income levels declined. In general, few believe that we are in a (land values) bubble that is bursting; rather, we are witnessing a correction in the long-term uptrend across the globe.”

Sixty-five percent of the survey’s respondents said they expect to see prices fall over the next five years, while 34 percent predict an increase.

“Factors that respondents indicated could have positive impacts include non-farm investor demand, Chinese demand, inflation pressures and instability around the world,” the report said. “Factors with the most negative impacts include commodity prices, input prices, net farm income and interest rates.”

Wise said it’s the job of his company to make sure sellers understand what’s happening to prices. “One of the handicaps we face is that sellers don’t want to admit their property is worth 5, 10, 15 percent less than a year ago. People haven’t reached that realization yet.”

Farmers have dominated the farmland marketplace but investors are also an integral part of it, he said.

The McDonough County auction drew about 100 people, Wise said. “Participants (at auctions) are down moderately from six months ago and probably even more from a year ago. We’re seeing more people attend auctions wondering what that farm down the road will sell for.

“Potential buyers are sitting on the sidelines wondering if they can buy it even cheaper a few months from now.”