2021 Farmland Leases: What you should know
Since 2017, Illinois has experienced stable cash rents. For 2020, Illinois’ average cash rent is $222 per acre, down $2 from 2019, according to USDA data. Generally, the highest cash rents in the state are in central Illinois.
In 2019, northern Illinois farms cash-rented 60% of their acres, followed by central Illinois at 44%, and southern at 44%. In comparison, central Illinois farms shared-rented 42% of their acres, followed by southern Illinois at 36%, and northern at 21%.
Lease options besides cash rent and share rent include variable cash rent and custom farming. While written leases are best, if there is not a written lease in place, the landowner must provide notice by Oct. 31 if they wish to terminate the lease.
“The best you can have is a written lease signed by both parties that is clear on the terms and agreement between the two parties,” said Jonathan Coppess, University of Illinois Gardner Agriculture Program director and Bock Ag Law/Policy Program director, during a farmdoc webinar. “But obviously there are a lot of verbal leases which are enforceable, they’re just more difficult. If you think of it in terms of risk, the less you have written down, the more risk you have of potential disagreements somewhere down the road.”
On central Illinois’ highly productive land, 2020 farmdoc projections include 230 bushels per acre for corn at $3.55 per bushel and 72 bushels per acre for soybeans at $9.30 per bushel, combined with ad hoc federal disaster assistance. In this scenario, with a 50% corn and 50% soybean rotation that’s cash rented, the projected farmer return is $44 per acre.
“Those farmer returns are up, but still, if you’re looking at those CFAP (Coronavirus Food Assistance Program) and MFP (Market Facilitation Program) payments, they’ve been absolutely critical in the past several years,” said Gary Schnitkey, Ph.D., University of Illinois, Department of Agricultural and Consumer Economics.
For sample leasing forms, go to: https://farmdoc.illinois.edu/agricultural-law
Members are invited to learn more about leasing farm property for the 2021 growing season by participating in the Commodity/Marketing Team video conference featuring Mr. Gary Schnitkey.
Land Lease & Trends Webinar
Gary Schnitkey will present information on farmland rental, price markets, and forecasts of farmland returns to Illinois farmland. Opportunity for Q & A for landowners and growers.
Date: Tuesday, November 17, 2020
Time: 6om
Location: Webinar via Zoom
Price: Free for members | $10 non-member
Registration: Call the Farm Bureau at 708-354-3276 or online at the Member Center at www.cookcfb.org