A new article from FarmDoc Daily suggests that Illinois cash rents must decrease by around $50 on average if farmers want to stay in business.
Based on an average corn price of $4.00 and an average soybean price of $9.25, which is optimistic based on the prices we’re seeing today after Monday’s WASDE report, all farmer and land returns are still below 2016 cash rents.
You can read the full article here.
Or you can do some investigation yourself using this chart.
The article summarizes that as farmers have to cut costs to make a profit and feed their own families, the pressure will fall on cash rents. At least $50 per acre average will likely be required to make ends meet on the farm, and maybe more if other input costs to not decrease.
Variable cash rent agreements are obviously preferable for this reason. Learn more about variable cash rents next week on FarmDoc Daily!