View from the Cab: Examining rents

By: Kent Casson

Cash rents on farms in Illinois held steady to slightly downward this year compared to 2024.

Farm managers from throughout the state released information analyzed by the Illinois Society of Professional Farm Managers and Rural Appraisers during last month’s Land Values Conference in Bloomington.

Information provided by University of Illinois Extension reveals cash rents negotiated for 2025 ranged from being flat to 10 percent lower, depending on location. Cash rents are greatly impacted by location and at the local level. Competition remains strong for leasing farm ground, with our state having 75 percent of its farmland leased.

Of course, cash rental rates depend on a farm’s profitability. Everyone knows grain profits are down following higher prices earlier in the decade. Cash rents are historically low compared to land values, according to the experts. Land values are also under negative pressure.

Typically, cash rents 20 to 25 years ago were 4.7 percent of land values, where today, they are slightly under three percent. Most farmland continues to be purchased by family farming operations.

Reasons for reducing cash rent include higher input costs, declining grain prices and higher interest rates. Landowners are concerned over higher property taxes. Illinois property tax rates are based on previous profitability levels and it takes six years plus to fully cycle through higher profit years to see lower property taxes.

Rents on farms with excellent soils declined slightly more than those with fair to good soils. Some locations still report cash rents of $450 to $500 per acre on excellent, well-drained soils with solid fertility levels. Leases which were recently negotiated on excellent farmland ranged from below $350 to $450 per acre in some places.

The ground on good soils also had a variable cash rent level ranging from $300 to $400 an acre. Those soils rated average had more modest cash rent declines – with some areas seeing a modest increase. Average soils ranged from $300 on some leases in the Interstate 70 corridor east of St. Louis to below $200 to the south. Cash rents on fair soils were variable, being steady to slightly down.

U of I Extension says farmers and landowners should closely monitor the economic situation throughout 2025. Parties to a farm lease contract should be in communication as the fall approaches about cash rent levels for 2026.

The full 2025 Farmland Values and Lease Report can be downloaded for free from the website https://ispfmra.org.