By Nick Paulson and Gary Schnitkey et.al
Projections in the latest Illinois Crop Budgets suggest negative returns on cash rented farmland for the 2026 crop year (see farmdoc daily article from January 13, 2026). This article compares projected incomes on rented farmland to owned farmland. Owned farmland with low to no real estate debt is projected to provide significantly larger incomes to the farmer. Projections for 2026 show that every debt-free owned acre of farmland can subsidize the projected losses on 15 acres of cash rented farmland. The average land tenure position of Illinois grain farms suggests an average net farm income in 2026 that will be positive but insufficient to cover average family living expenses and income taxes without additional non-farm income. Higher rates of farmland ownership with low debt loads results in better income prospects for 2026 and more resiliency during poor income periods in general. However, limited purchase opportunities and the cash flows needed to finance farmland purchases remain significant barriers for farmers.
2026 Return Projections
Table 1 summarizes per acre income projections for different land tenure scenarios based on the January 2026 Crop Budgets for central Illinois, high-productivity farmland. A 50-50 corn-soybean rotation is projected to generate $312 per acre in operator and land returns. This includes a $56 per acre projected ARC/PLC program payment that, if triggered, would not be received until October of 2027.
For owned farmland, costs include property taxes and, if applicable, interest expenses on land debt. Property taxes for farmland in central Illinois are estimated to average $80 per acre. For farmland with no debt, the projected net income to owned land is $232 per acre. Owned farmland with an average debt load for Illinois grain farms would also include an interest cost of around $50 per acre, reducing the net farmer return projection to $182 per acre.
For cash rented farmland, the average cash rent level projected for 2026 in central Illinois is $327 per acre. This results in a negative farmer income projection of -$15 per acre for 2026 on cash rented acres. Table 1 also provides a scenario for farmland rented under a typical 50/50 share lease where the net rental payment (land cost) for the farmer is 50% of the gross revenue less 50% of the direct costs (0.5x$963 – 0.5x$375 = $294 per acre). The projected farmer income for a share leased acre for 2026 is $18 per acre.
Source : illinois.edu