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Signs point to a turning land rent tide
In 2007 -- just 6 years ago -- cash rent was about $183/acre for decent farmland.
Last year, that same land rented for, on average, just shy of $400/acre.
That's a pretty sharp increase. But, move forward 1 more to this year and the trend shows definite signs of slowing or maybe even fizzling altogether, according to University of Illinois Extension ag economist Gary Schnitkey.
Recent data from the Illinois Society of Farm Managers and Rural Appraisers shows there's essentially been a pullback in the climb in rental rates in just the last year. And, it's significant. And, it could foreshadow a reversal in the years ahead, especially if this year's crop is closer to a trendline yield.
"Cash rent increases between 2013 and 2012 are less than those between 2011 and 2012. For excellent quality farmland, rents increased $17 between 2012 and 2013 ($396 in 2013; $379 in 2012), compared to a $60 increase when 2011 and 2012 ($379 in 2012; $319 in 2011)," Schnitkey says in a university report. "The next year could be pivotal in terms of cash rent increases. If normal crops occur and commodity prices fall, cash rents in 2014 may not increase."
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