Cash Rents Are Up for 2023, But Will 2024 Be Better?

    ©Debra L Ferguson Stock Photography

    The USDA National Agricultural Statistics Service (NASS) recently released data showing that cash rents for cropland have increased nationwide in 2023.

    Between 2022 and 2023, the national average for cropland cash rents grew from $148 to $155 per acre – a 4.7% increase. The lowest reported average was in Montana at $35 per acre, compared to the highest in Arizona at $347.

    Within the corn belt, values increased 5.8% from $223 to $236.

    Farmdoc Daily from the University of Illinois did a state-specific deep dive in the data to show how values have changed over time, as well as how different values can be across states.

    Land Value over time in Illinois

    Land value across counties

    According to the Purdue Farmland Value and Cash Rent Survey, these exceptionally high rates broke records in Indiana – exceeding the previous highs set in 2013, 2014, and 2021, respectively, for top, average and poor-quality land.

    There may, however, be a shift soon.

    Purdue’s survey showed that though Indiana’s values are at an all-time high, the rate of increase has slowed in comparison to 2022. Survey respondents also expect modest declines in the remainder of 2023.

    “2020, 2021 and 2022 were very good years from a profitability and net return to land standpoint. That created the upward pressure in cash rent that we’ve seen the past two or three years,” says Michael Langemeier, associate director of the Purdue Center for Commercial Agriculture, in a recent podcast. “Looking ahead, we’re projecting a net return to land in 2023 to be considerably lower than it was the last three years.”

    The Illinois Society of Professional Farm Managers and Rural Appraisers is also expecting slight decrease in cash rent numbers for 2024.

    The society shares that while cropland cash rent values do tend to follow trends in farm returns, there is a 1 to 2-year lag.

    The Farmdoc graph below shows the farm return trends for central Illinois.

    Income changes over time

    With the USDA reporting a net farm income decrease in 2023, the society predicts cash rent values to follow next year.

    “How much downward pressure will depend on what the corn price is this fall,” Langemeier says. “You’re looking at a situation where you could easily see a 2 to 3% decline in cash rent in 2024 compared to 2023.”

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