2018 Farm Outlook

2018 Logan County Farm Outlook Magazine LINCOLN DAILY NEWS Oct. 25, 2018 Page 27 However, some unlikely market forces have been participating in land auctions and sales, and driving the price way up for the last 10 - 15 years. According to local sources, outside participants have helped keep land prices higher than the national average in central Illinois. An influx of bidders and money from “other than farm” sources, many from out- of-state have been participating in local land auctions and sales. Capital investment firms have been buying up central Illinois farm ground at auction because it maintains its value in an economy where stocks and bonds may not hold their value, and because it returns approximately 2-3% on investment. Adding farm ground to their clients’ mutual fund portfolios provides stable, concrete diversity even in the midst of troubled economic times. These investment firms have been bidding the price up and providing competition for local buyers. It is widely reported that another entity competing at auctions for central Illinois farm ground is the Mormon church. The Mormon church is reported to have extensive land holdings in 24 states in the United States, much of it in Florida and Missouri, but is quite active purchasing ground in central Illinois. Because it is a religious organization, the Mormon church does not have to disclose any information about its property holdings, so the extent of its holdings can only be guessed at. In addition to not having to disclose their holdings, the Mormon church does not have to pay any taxes on the properties or the income it derives from those properties, and so every acre of ground that it buys here in central Illinois is removed from the counties’ important source of income, property taxes. Both of these entities, capital investment firms and the Mormon church, show up at larger acreage auctions and compete with local land- buyers, driving prices up. Their aim is to drive the prices up so that their land investment- holdings maintain a high value. So, since these out-of-state buyers show up to bid on larger tract auctions, larger acreage sales tend to bring a higher price than smaller acreage sales. Competing right alongside these out-of-state buyers are larger local producers who are looking to increase their production acreage. While the out-of-state buyers purchase these plots to put them up as cash rent ground, the local producers are buying the ground to keep it out of the hands of the investment firms and the religious groups and farm it themselves. CONTINUED