In recent weeks, two sources released cash rent information for Illinois. The U.S. Department of Agriculture released county average cash rents for 2014. The Illinois Society of Professional Farm Managers and Rural Appraisers released 2014 and expected 2015 cash rents for professionally managed farmland. Expected 2015 rents point to decreasing cash rent levels on professionally managed farmland. Whether or not other cash rents follow professionally managed cash rents down is an open question.
Average Cash Rents in Illinois
The National Agricultural Statistical Service (NASS) - an agency of the U.S. Department of Agriculture - released 2014 average rents per county on September 5, 2014. A number of counties do not have cash rents reported, likely because statistically reliable rents could not be obtained with survey responses.
Overall, 2014 average cash rents were higher in 2014 than 2013. According to NASS, the average rent in Illinois increased from $224 per acre in 2013 to $234 per acre in 2014, an increase of 5%. This continued a string of years of large increases. Since 2006, average state rents in Illinois have increased from $132 per acre in 2006 to $234 per acre in 2014, an increase over this eight year period of 77%.
Professional Cash Rents Levels
The Illinois Society of Professional Farm Managers and Rural Appraiser released results of its annual mid-year survey. This survey asked for 2014 and expected 2015 cash rents on professionally managed farmland. These rents, along with 2013 cash rents from a previous survey, are shown in Table 1. Average rent levels are shown for four classes of farmland productivity:
Excellent - expected corn yields are over 190 bushels per acre
Good - expected corn yields are between 170 and 190 bushels per acre,
Average - expected corn yields are between 150 and 170 bushels per acre, and
Fair - expected corn yields are below 150 bushels per acre.
Average cash rents decreased between 2013 and 2014. For excellent quality farmland, cash rents decreased from $396 per acre to $374 per acre in 2014, a decrease of $14 per acre.
On professionally managed farmland, cash rents likely will continue to decline into 2015. For all quality classes, Society members indicated that rents would be lower in 2015. For excellent quality farmland, for example, cash rents are projected to decrease from $374 per acre in 2014 to $338 per acre in 2014, a decrease of $36 per acre (see Table 1). If the decrease occurs, cash rents would decrease by about 10%.
There is a considerable range in cash rents for similar productivity farmland within a small geographical area, with some rents above the average by $100 and other rents below the average by $100. Below average cash rents could continue to increase to "catch up" with average levels. At the same time, above average cash rents could decrease, as indicated by results from the Illinois Society. These two forces could counter each other, leading to stable or maybe even increasing average cash rent levels.
Rents on professionally managed farmland could decrease in 2015. Other above average cash rents could decrease as well. However, below average cash rents may remain stable or increase. Overall, rent decreases likely will not cover decreases in lower returns projected for 2014 and 2015.