URBANA – Farmers who rent land will probably need to renegotiate what they pay after watching corn and soybean prices fall, a process that could uncomfortable, a University of Illinois economist said.
Farmers' profits this year and next will be "considerably below" the levels of the past few years, economist Gary Schnitkey said. Schnitkey said that will mean many farmers will need to push for lower rents than they've been paying to keep their finances sound, according to The News-Gazette.
"This will be a difficult process for both land owners and farmers," Schnitkey said. "Renegotiating cash rents down presents farmers with a delicate situation, with the potential to lose farmland as a result of the negotiations."
Soybeans have fallen well below $11 a bushel and corn to about $3.70 a bushel. Prices on both of those key Illinois crops are lower than they have been since 2010. According to the U.S. Department of Agriculture, Illinois and Iowa are the top two producers of each crop virtually every year.
Prices have fallen as the expected size of each crop has grown. Farmers across the Midwest are expecting strong production thanks to a season of good weather.
Many corn and soybean farmers rent at least part of the land they farm.
Schnitkey said land owners need to be aware that the economic situation has changed for farmers after several very profitable years.
"Since the fall of 2013, commodity prices have decreased," he said.