Date of Award
Master of Science (MS)
Department of Agriculture
Maria A. Boerngen
In recent years, cash rent leases have become increasingly popular amongst farm landowners in Illinois. Since 1995, Illinois has seen a 44% rise in cash rent lease usage in Northern Illinois, a 105% increase in Southern Illinois, and a 117% increase in Central Illinois for acres enrolled in the Illinois Farm Business Farm Management Association, which helps operators make farm management decisions. The rise in cash rent lease usage has been attributed to many factors such as crop yields, commodity prices, crop revenue, commodity payments, and crop insurance. This study aims to determine which factors are the most pivotal in driving the shift toward the use of cash rent leases in Illinois. Using data from the USDA National Agricultural Statistics Service (USDA-NASS), the Environmental Working Group (EWG), and University of Illinois farmdoc, the determinants mentioned above were examined to explore the effects they have on the increasing use of cash rent leases. Data from each variable was collected from all 102 counties in Illinois over a 21-year period and then moved into the correct region. Comparisons were made across the three regions in Illinois (Northern, Central, and Southern) from 1995-2015 using four different fixed effects regression models. Results indicate that crop insurance payments (p < .001), corn price (p < .05 ), soybean price (p < .05 ), corn revenue (p < .05 ), soybean revenue (p < .05 ), and commodity payments (p < .05 ) have all influenced the increasing use of cash rent leases in Illinois. However, corn and soybean yield did not influence increasing cash rent usage in Illinois. Although there were only 5,500 Illinois farms examined in this study, the findings can be viewed as a starting point for why the usage of cash rent leases are increasing in Illinois. With agriculture consistently changing, any variations that occur to the variables examined in this study could potentially have major ramifications on the leasing market in the years to come.
Styan, Jacob, "Increased Usage of Cash Rent: Factors Influencing Illinois Farmland Leases over the Past Two Decades" (2020). Theses and Dissertations. 1212.