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Margin squeeze expected to keep cash rents stable
The assistant director of the TIAA Center for Farmland Research with the University of Illinois says cash rental rates are expected to stay steady heading into next year.
During a recent FarmDoc webinar, Dr. Juo-Han Tsay notes the recent market rally is being offset by high input costs, so rental rates aren’t likely to change much.
“Remember the WASDE projection for corn is almost $5 and soybean is $12.” She says, “So given that, I would expect that rents decreasing will be even smaller than $3 to $5.”
She says statewide average cash rental rates peaked in Illinois and Iowa in 2024, but…
“Iowa and Illinois are the only two Midwestern states that current rent values are below their 2024 levels.” She says, “All the other Midwest states, Missouri, Ohio, Michigan, Minnesota, Wisconsin, and Indiana are still edging up based on USDA NASS data.”
According to Tsay, cash rent leases typically renew on March 1st each year, however renewal notice deadlines can vary significantly by state. In Illinois, October 31st is the deadline for non-renewal notification, as well as the termination date for non-written leases.
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