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Cash land rent climb mellowing in Illinois
If you farm rented ground, the jump in what you pay for that land may not sting as badly next year as it did this year.
A recent survey of farm managers and rural appraisers in Illinois shows that, while the direction in land rent is still the same, the jump's not likely to be as steep between 2012 and 2013 as it was between 2011 and this year, says University of Illinois Extension ag economist Gary Schnitkey. In the latter timeframe, rents increased an average of 16%, matching the highest rate of year-over-year climb in more than 30 years.
"Relatively small increases between 2012 and 2013 likely occur because return projections for 2013 are below those for 2012," Schnitkey says in a university report. "This fundamental does not suggest increases in cash rents. Moreover, the 2012 drought may have tempered aggressiveness in setting cash rents."
You're likely to pay between 1% and 3% higher cash rent in 2013 than you have been this year, according to the survey. For land expected to produce at least 190-bushel/acre corn, the average cash rent's expected to move to $384/acre compared to the 2012 rate of $373, a rise of 2.9%. Land able to raise 170- to 190-bushel corn will likely rent for around $326/acre, according to the survey. That's a 2.8% increase. "Average" ground capable of 150- to 170-bushel corn will fetch around $272 in rent next year, while those acres in the "fair" category -- where you can raise 150-bushel corn or less -- will bring around $214/acre in rent. That's a 1.5% increase for average land and 0.9% for fair ground, Schnitkey's survey shows.