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 This sounds like a big deal, and it is! At current market prices,
this translates to a bit over $200 per corn acre in lost income.
What makes this important is the loss in ability to pay higher
rents, the ability to upgrade equipment, buy inputs, and to provide
for family living needs. You do the math on what $200 per acre at
just short of 195,000 acres takes out of the Logan County economy.
Soybean yields were off of the record of 63.7 bushels per acre last
year by about 11%, coming in at 56.6 bushels per acre for 2015. At
least soybeans remained above the 10 year average yield, whereas
corn was below by about five bushels per acre.
The culprit was water. We just had too much of it in a short period
of time, and when the crops were susceptible to damage. Granted,
there were some exceptional yields where there wasn’t water damage.
On the other hand, there were some really rotten ones where the
damage did occur. That’s how we get an average.
For a bit of a comparison, neighboring counties DeWitt and Macon
both had corn yield averages over 207 bushels to the acre for 2015.
 Many producers will be using some of the income “safety nets” in
place. The main ones include Federal Crop Insurance and the Farm
Programs such as ARC or PLC. These become very important in
maintaining income to help with bills including the inputs and land
rental.
Probably the number one question we receive annually is “What is the
going cash rent?” And, of course, there really isn’t a great answer
which fits all situations. The going rate is really what is agreed
on by landlord and tenant on a specific piece of ground. Sure, there
are some indicators and averages, but they aren’t specific rents in
an area smaller than a county area.
Two of the most quoted rents are from the National Ag Statistics
Service and the Illinois Society of Professional Farm Managers and
Rural Appraisers.
The National Ag Statistics Service actually surveys producers to
determine what has been paid, this is then published in September to
cover the current year. One problem is, beginning this year, they
only do the survey in even number years. So, we’re looking at 2014
rents printed in September of 2014. The next one will be 2016 rents
published this coming September.
The 2014 rent average for Logan County was $308 per acre, which was
tops in the state.
The Farm Managers Rural Appraisers numbers come from surveying their
members. These numbers come from professional managers, such as farm
managers in banks or management companies. These numbers tend to be
higher than those from Ag Statistics, but remember a portion of that
is to recover costs for the landlord to compensate the professionals
for their services. They publish past and future expected rents for
different classes of land.
The 2015 rent for excellent ground (over 190 bushels of corn per
acre) was tagged at $378 for the high one-third, $350 for the middle
one-third, and $275 for the low one-third. Expected 2016 rents from
those were expected to be about $318 for excellent ground. This was
the expected number from early last fall.
Land classified as good (with a 170 – 190 bushel corn yield) fell
off from an average of $295 in 2015 to an expected $267 rent for the
2016 year.
The reality is, rents have been decreasing about 10 percent per year
for the past two years. One rule of thumb for discussing cash rents
is one-third of gross income on corn acres to the landlord. This
would include anticipated corn sales, crop insurance income, and any
government program payments. A quick estimate for 2016 looks to be
about $250 - $260 per acre, assuming good yields, stable prices, and
adding in estimated farm program payments (which are now received a
year late).
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 What’s in store for the weather? It is certainly easier to look
in hindsight. The National Weather Service predictions for the 2016
March to May period in our area are slightly above average
temperatures and slightly below average precipitation. This
certainly doesn’t mean it won’t be cool or we won’t have significant
rainfall. Put simply, this is the predicted average for the entire
period.
As we experienced in 2015, and in fact most years, a few miles
difference makes a world of difference.
The predicted switch from El Nino to La Nina would also tend to mean
less precipitation and higher temperatures.
Given the weather predicted, what’s in store for farm income? Unless
something drastic happens, the consensus is for farm income to
continue being squeezed.
This will mean further reliance on farm income safety net programs
until input costs decline in like fashion as crop prices have
already.
Not to wish bad circumstances to anyone, but it will probably take a
major weather upset somewhere in the world to bite into the record
stockpile of corn and soybeans we have built up over the past few
years.
Add in the strengthening dollar, the collapse in oil prices, and add
in other factors, and producers will continue to look for ways to
tighten their belts.
As always, producers remain optimists as we look forward to field
preparations and the upcoming planting season. There’s nothing
better than working the land and seeing the miracle that begins with
planting a single seed.
Here’s hoping we have a safe, productive, and successful year in
agriculture.
John Fulton
County Extension Director
University of Illinois Extension
700 South Airport Drive
Springfield, IL 62707
http://web.extension.illinois.edu/lms/
fultonj@illinois.edu
phone 217.782.4617 fax 217.524.6662 Serving Logan, Menard, and
Sangamon Counties
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