While Illinois imposed a 10 percent hike in farmland assessments seen tax bills recently mailed to Woodford County residents, high grain prices have also helped drive up the price of farmland.

“We did see some land auctions in Woodford County that happened in early March, and we had some as high as $12,000 to $13,000 an acre,” said Dana Wiegand, vice president at First Farm Credit in Morton. “That is a substantial increase over the last 12 months.

{courtesy:  Bloomington Pantapraph}

“Our calculations are coming in at anywhere between 25 and 40 percent increase in land values.”

Grain prices, which reached $7 a bushel for corn last sum-mer, put a lot of cash in the marketplace, Wiegand said, and local farmers have been investing it back into real estate.

“Interest rates are at historically low levels, and if they can borrow money for 15 years below 5 percent, that’s been another reason that land prices have continued to remain strong,” he said.

Tax assessments for farmland are set statewide using a complicated Productivity Index (PI) that attempts to measure the productivity of the soil. Residential, commercial and industrial property is assessed locally at one-third of fair market value.

In 2011, Woodford County’s total equalized assessed value was $868.5 million. Woodford County Assessor Mary Bell said her office has been busy with calls since tax bills went out May 29.