URBANA, Ill. – Already dealing with year-over-year stagnant commodity prices, Illinois farmers continue to navigate rising land costs and shifting expectations around cash rent. This raises the question: How much is too much?

Gary Schnitkey and Nicholas Paulson, farm economists from the University of Illinois, broke down the key pressures shaping today’s rent decisions, including how producers at different stages of their operation can avoid overextending themselves and recognize when an opportunity may not be as good as it appears, during a recent webinar. The session, which included a follow-up Q and A session, was offered to help farmers think more strategically about rent negotiations and long-term financial stability.

“There are definitely pressures for reductions in some of the farmland rents we are looking at,” according to Paulson.

To begin the webinar, Schnitkey examined the current economic environment that both beginning and experienced farmers face when deciding whether to enter negotiations over current rental rates or expand cash rental acreage. The economist noted that USDA projections for the 2026-2027 market year call for $10.60 per bushel soybeans, $5.20 wheat and $4.25 corn, which is not much of a change from 2025-2026 predictions of $10 soybeans, $5.52 wheat and $4.24 corn. Coupled with continued high production costs, 2026-2027 will likely shake out as another year of below breakeven returns for Midwest row crop producers, he shared.

“In 2022 we saw $6.50 (per bushel) corn and $14,20 soybeans, but here we are today. When we look out at futures, we are looking at $4.25 and $10.60, so that is roughly the same as we have for this year,” Schnitkey said. “For the foreseeable future, I see us with $4 corn and $10.50 soybeans.”

Production costs for both cash rents and non-land costs are projected to reach $974 per acre in the 2026-2027 market year for a typical central Illinois corn-soybean crop rotation, according to Schnitkey, with average cash rent costing $327 per acre and non-land costs estimated at $647 per acre. “We’ve seen some moderation of costs, but not much,” Schnitkey said, pointing to the 2022-2023 market year production cost average of $1056 per acre, when fertilizer prices peaked.

“I don’t think we are going to see much more moderation in costs, particularly for next year if not the year after that,” he added. “That does present a problem, because when you look at where prices are and where costs are a breakeven in this situation is above what the market is offering.”

For this reason, cash land rental arrangements, whenever possible, should be renegotiated with landowners to bring costs more in line with projected income, the economists said. According to data shared by Paulson, average statewide cash rental rates for Illinois farmland began to trend lower last year and are projected to continue to trend downward in 2026 – perhaps by as much as $20 per acre.

“We saw big (cash rental rate) increases due to high prices, high incomes and high government payments in the 2021-2022 crop years. Much like coming out of that high-income financial period of 2012-2013 we are starting to see some of these financial pressures play out into some cash rent declines, in the averages we look at and some of the survey indicators,” Paulson said. 

The latest biennial survey conducted by the Illinois Society of Professional Farm Managers and Rural Appraisers indicates that participants expect 2026 cash rental rates to decrease by $15 to $20 per acre relative to 2025, he added, with their projections based on last August’s 2026 price expectations of just under $4 per bushel for corn and just under $10 per bushel for soybeans.

Larger cash rents are trending in the northern two-thirds of the state, particularly in the western and eastern edges of central Illinois as well as in the southern third of the state, according to Paulson, but virtually nowhere else. “There are more counties with 2025 cash rent averages that were lower than those same averages in 2024 than counties with higher ones. There are also some counties where cash averages increased, and there is also great variability within some counties,” he said.

Paulson cautioned that despite their recent surge in popularity, variable cash rent agreements may not provide a gateway to lowering cash rental rates due in part to additional income derived from recent government payment programs and ad-hoc bridge payments.

“We have seen ad hoc programs step in here, and the precedent has been set to expect that now. In the current environment that we are in, even variable cash rents based on revenue don’t completely fix the problem,” Paulson said.

Schnitkey advised most young and beginning farmers to be “very selective” in investing more capital into rental acreage, encouraging them to instead focus on deriving other sources of income from existing farmland.

“The backdrop right now is that rental farmland has provided negative returns for the past several years,” he said. “In 2025 we are expecting a positive return, but that is built on federal payments and farmer bridge payments. Looking out into 2026 we are seeing the same thing in a 50-50 corn soybean rotation in Illinois. We are coming up with a (negative) farmer return. For the foreseeable future this will likely (remain) the case.”

Paulson wrapped up the Jan. 6 webinar, sponsored by the Illinois Soybean Growers, by acknowledging that established producers and operations showing positive financial returns may elect to invest more capital into rental acreage. 

“A lot of farm operations are still strong financially,” Paulson said. “Experienced farmers should think about this selectively as well. Even if you are established…you have to look at those cash rented parcels and ask yourself why you are doing this. It’s tough to let a farm go, but it’s a question we need to ask ourselves. We need to ask ourselves where our costs are relative to where our prices and our revenue potential is at.”