Saturday, September 17, 2011

DTN/The Progressive Farmer: Agriculture Markets, News and Weather

Rumors that some Corn Belt farmers are paying $500 cash rents in 2012 sound like that imaginary rabbit friend named Harvey in the Jimmy Stewart movie to me. In other words, they may exist but nobody in the know can confirm it.

More reliable are surveys of average cash rents?and they remain at much more reasonable levels (see table below).

Once again, Illinois takes the prize for most extreme cash rent but Iowa isn?t far behind. According to data released by the National Agricultural Statistics Service last week, Illinois?s Macon County tops the list with an average cash rent of $260 an acre in 2011. Iowa?s top county?Hamilton?weighed in at seventh place with an average of $235.

In fact, Illinois claims 19 of the top 25 most expensive farmland rental counties in the U.S. , all topping $200 an acre. Most of them are located in northern and central Illinois. Iowa fielded the remaining six counties on the top hit list. In fact, no other state made the list until Faribault County, Minn. (No. 64).

The NASS averages represent a blend of all land types and both family and arms-length lease terms from professional farm managers. It?s not unusual for rents to vary $100 lower or higher than the farms in the same county, notes University of Illinois economist Gary Schnitkey. Ironically, some of the most competitive Illinois counties seem high relative to other counties with similar quality land,? he says?something he attributes to a handful of 10,000- to 15,000-acre-and-up farmers who are willing to bid aggressively to expand.

In a recent posting on farmdocdaily, Schnitkey also noted that the Illinois Society of Professional Farm Managers and Rural Appraisers latest survey pegs 2012 rents at $367/acre for excellent soils, up from an average of $329 this year. That?s based on corn prices in the high $5-per-bu. range and soybeans in the $13 bu. range. But forecasting yields, prices and revenues can be fraught with error. Barely a year ago, corn brought only $4. Now USDA says the season-average cash price for the 2011 crop will run $7.

?Chances are next year will be a good year for prices,? says Schnitkey. But the danger for renters is that crop insurance guarantees won?t be set for another six months. Much can happen in the interim both to commodity prices or input costs like fertilizer.

?One of these years, prices will break,? Schnitkey says. ?It?s hard to say when. But it will be interesting to see what happens to high-end rents when the revenues aren?t there.?

For more commentary on Illinois rents, see Schnitkey?s post at http://www.farmdocdaily.illinois.edu/?

TOP 2011 COUNTY AVERAGE CASH RENTS

(Source: NASS/USDA surveys)

1. Macon, IL $260

2. Sangamon, IL $252

3. Logan, IL $246

4. Macon, IL $242

5. Piatt, IL $241

6. Christian, IL $237

7. Hamilton, IA $235

8. Grundy, IA $234

9. McLean, IL $233

10. Champaign, IL $233

11. Moultrie, IL $233

12. Logan, IL $232

13. DeWitt, IL $226

14. Carroll, IA $226

15. Webster, IA $225

16. Warren, IL $224

17. Cedar, IA $224

18. Douglas, IL $221

19. Cass, IL $221

20. Story, IA $221

21. Cherokee, IA $220

22. Franklin, IA $217

23. Humboldt, IA $217

24. DeKalb, IL $216

25. Whiteside, IL $216

Source: http://www.dtnprogressivefarmer.com/dtnag/view/blog/getBlog.do?blogHandle=business&blogEntryId=8a82c0bc31d5e6e3013269ec4a570619

fashion night out white house peyton manning gia kristin chenoweth outlook real steel

No comments:

Post a Comment

Note: Only a member of this blog may post a comment.