Cash rent outlook
Purdue Ag Economist Michael Langemeier says downward pressure on cash rents has declined.
“Downward pressure on 2020 cash rents has evaporated…and that’s because the net return to land is very close to the cash rent and so there just isn’t that much pressure for 2021 cash rents to decline,” he says.
But, he says it’s a little early to be looking at increases in cash rent in 2021 and 2022.
“The fact that the land price to net return is higher than the land price to cash rents suggests we still don’t have very much upward pressure on cash rents looking at next year and two years from now,” he says.
Langemeier says landowners and growers should consider a flexible cash lease arrangement in the coming year because of recent volatility.