Illinois Farm Cash Rents in 2021
Feb 1, 2022
Like commodity prices and weather forecasts, lease rates for farmland are critical information to many Illinois farmers. This closely watched data impacts planning and profitability. These rates obviously matter greatly to the landowners, too. Rental income determines how much of a return they are getting for their investment in the land.
Making them even more important is that cash rents comprise a significant portion of farming land arrangements in Illinois. In fact, statistics show that farms in northern Illinois cash-rented 60% of their acreage in 2019.
Illinois, with its rich soil that is optimal for growing corn and soybeans, typically has the highest cash rental rates nationwide. However, lease rates have been relatively stable for the past few years. The average rate to rent cropland in Illinois was $224 per acre in 2019, changing only slightly to $222 in 2020, according to the U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS). The value of cropland in the state was $7,300 per acre for 2019 and 2000.
To determine average rates for Illinois farm cash rent in 2021, the NASS is surveying Illinois farmers and ranchers and collecting information about land rental rates. Average cash rental rates for certain types of farmland — non-irrigated cropland, irrigated cropland and pastureland — are scheduled to be published on Aug. 6, according to the USDA. The breakdowns by county are to be released Aug. 27. Farmers and ranchers typically rely on this information to negotiate future rental agreements. NASS planned to reach out to more than 9,000 farmers for the survey.
The Illinois Society of Professional Farm Managers and Rural Appraisers projected a slight decrease in rents for 2021. The projected drops, broken down by the quality of farmland: excellent productivity, from $305 per acre to $297; good, from $270 to $253; average, from $224 to $212; and fair, from $173 to $160.
Of the 10 counties with the highest average cash rental rates nationwide in 2020, eight were in Illinois, according to the American Farm Bureau Federation. This included Macon County, with the highest average cash rental rate in the U.S. at $294 per acre. Rates were higher than $200 per acre in about 70% of the counties across Illinois and Iowa, according to the federation.
Key Factors: Location and Land Quality
Two primary factors that determine cash rental rates are location and the quality of the farmland, as measured by its productivity. Competitiveness in a specific location will drive rents up, but here’s how average rental rates were impacted by land quality in 2020, according to the Illinois Society of Professional Farm Managers & Rural Appraisers: Excellent quality farmland, $300; good productivity, $250; average productivity, $180; fair productivity $125. Translated, that means rents for excellent farmland are nearly 2.5 times higher, on average, than for farmland that yields only fair productivity.
Achieving Cash Rent Efficiencies
With commodity prices depressed, many landowners have switched from crop share leases to these fixed cash rent leases. CommonGround is an online farmland marketplace that brings efficiencies to the market for these lease arrangements.
Our data-centric land management system helps farmers search for tillable land and helps landowners and farmers establish the lessor/lessee relationship and manage their current inventory. Our aerial and soil maps help farmers make informed decisions about land quality and potential yield, and our Cashrentstimate tool helps landowners determine what their tillable land is worth.
Browse CommonGround’s available listings here or try our Cashrentstimate tool here. To learn more about the marketplace and how it works, contact us.
Sources
https://farmdocdaily.illinois.edu/2020/09/cash-rents-in-2020-and-2021-projections.html
https://www.fb.org/market-intel/cash-rents-remain-stable-in-2020