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.”

Tsay 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. 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 1^st each year, however, renewal notice deadlines can vary significantly by state. In Illinois, October 31^st is the deadline for non-renewal notification, as well as the termination date for non-written leases.

EDITOR’S TAKE:

Stable cash rents for ag land will help offset some of the increased cost of diesel, fertilizer and seed. This will also provide more stability while planning crops and rotations for the 2027 growing season. If only we could get some relief on other input costs, margins could improve in the coming year.

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