How long will it take before "high" cash rents are lowered? The answer to this question will depend on the willingness of farmers to sustain losses on "high" cash rent farmland. Here, the University of Illinois estimates farmer returns for average and high cash rents. Farmers with average cash rents are projected to have marginal returns in 2014. Losses around $60 per acre range are projected to occur with high cash rents.
Calculation of Farm Returns
Table 1 shows estimates of 2014 operator and farmland returns for northern, central and southern Illinois. Central Illinois is further divided into categories for high-productivity farmland (195 bushel per acre expected corn yield) and low-productivity farmland (186 bushel per acre expected yield). Returns are calculated for the expected yields shown in Table 1, a corn price of $4.60 per bushel, a soybean price of $11 per bushel, and costs contained in the 2014 Illinois Crop Budgets (here). Rotations are 2/3 corn - 1/3 soybeans for northern and central Illinois with high productivity farmland, 1/2 corn - 1/2 soybeans for central Illinois with low productivity farmland, and 1/3 corn - 1/3 soybeans - 1/3 wheat-double-crop-soybeans for southern Illinois.
Returns include $20 per acre of revenue from a Federal commodity program. These are included under the presumption that some form of commodity program will exist for the 2014 year, perhaps in the form of a revenue program. All returns would be projected $20 per acre lower if these commodity program payments are not included in the following calculations.