Outline. Outlook for Crop Farm Income, Cash Rents, Farmland Prices, and Agricultural Credit. U.S. Corn Yield, U.S.

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Outlook for Crop Farm Income, Cash Rents, Farmland Prices, and Agricultural Credit September 1st, 217

Schnitkey, David Klein, and Todd Kuethe Net Income on Illinois Grain Farms, 1996-216, 217P Farm Income

S. 2 18 16 Bushels per Acre 14 12 1 8 6 USDA release 217 forecast on August 1 USDA forecast = 169.5 bu.

1 Outlook for Crop Farm Income, Cash Rents, Farmland Prices, and Agricultural Credit September 1st, 217 Outline Outlook for Crop Farm Income, Cash Rents, Farmland Prices, and Agricultural Credit Gary Schnitkey, David Klein, and Todd Kuethe Net Income on Illinois Grain Farms, , 217P Farm Income Gary Schnitkey Cash Rents and Price (ISPFMRA Survey) David Klein Agricultural Credit Todd Kuethe U.S. Corn Yield, U.S Bushels per Acre USDA release 217 forecast on August 1 USDA forecast = bu. per acre Trend yield = bu. per acre

September 1 st, 217 Illinois State Yields, Corn U.S. Soybean Yields 6 2 5 Bushels per Acre 15 1 Bushels per Acre 4 3 5 USDA release 217 forecast on August 1 USDA forecast = 188 bu.

2 September 1 st, 217 Illinois State Yields, Corn U.S. Soybean Yields Bushels per Acre 15 1 Bushels per Acre USDA release 217 forecast on August 1 USDA forecast = 188 bu. per acre Trend yield = 178bu. per acre USDA release 217 forecast on August 1 USDA forecast = 49.4 bu. per acre Trend yield = 46.9 bu. per acre Market Average Prices and Forecasts Time Period P 17P 18P Corn ($/bu.) Soybeans ($/bu.) Wheat ($/bu.) Projection for 216 and217 are WASDE projections, 218 are looking at future markets Fall 217 bids (east-central Illinois, August 31): $3.2 corn $9.5 soybeans ARC-CO Payments, Corn, McLean County Input County MYA Benchmark ARC ARC Yield Price 1 Yield 2 Price 3 Guarantee 4 Payment 5 Payment $/acre $/acre * National loan rate equals: 1.95 Agricultural Risk Coverage (ARC) - County Five- Average Reference price equals: 3.7 Price Loss Coverage (PLC) 2

3 September 1 st, ARC-CO Payments (received this fall, still estimates) Corn Payments From $ to $6 per base acre, more of the highs in southern Illinois Soybean Payments Mostly $ per base acre Wheat Payments From $ to mid $ per base acre Table 1. Projected 216 ARC-CO Payments per Base Acre After Sequestion by Crop, Illinois. 1,2,3,4 Soy- Soy- Soy- Corn Beans Wheat Corn Beans Wheat Corn Beans Wheat Adams 9 Hardin NA NA Morgan Alexander Henderson 25 2 NA Moultrie 39 NA Bond NA NA NA Henry 49 Ogle 4 4 Boone Iroquois 35 Peoria 8 1 NA Brown 15 NA Jackson 56 NA NA Perry 49 NA Bureau 66 NA Jasper Piatt Calhoun NA NA 18 Jefferson 49 NA Pike 4 33 Carroll 11 4 Jersey Pope NA Cass 37 3 Jo Daviess Pulaski Champaign 1 42 Johnson 5 NA NA Putnam 18 2 Christian Kane Randolph Clark NA NA 34 Kankakee 29 Richland Clay Kendall 26 NA NA Rock Island 31 NA Clinton Knox St. Clair Coles NA NA Lake Saline 6 32 Cook NA NA LaSalle 45 NA Sangamon 5 NA Crawford NA 32 Lawrence NA NA 32 Schuyler Cumberland Lee Scott NA DeKalb Livingston 35 Shelby De Witt 64 1 NA Logan 8 NA Stark Douglas McDonough Stephenson 37 4 DuPage NA NA NA McHenry Tazewell 35 Edgar 51 NA McLean 18 2 Union 51 2 NA Edwards Macon 3 Vermilion NA Effingham 6 33 Macoupin NA Wabash Fayette 5 NA Madison Warren 5 NA Ford NA Marion Washington Franklin Marshall 45 NA Wayne NA NA Fulton 11 NA Mason NA NA NA White Gallatin Massac Whiteside 43 NA Greene 2 32 Menard 48 NA Will NA NA Grundy NA Mercer 31 NA Williamson 57 NA Hamilton 56 NA Monroe Winnebago 5 37 Hancock NA Montgomery 9 NA Woodford Non-land Costs, Corn and Soybeans $ per acre $7 Corn Soybeans $6 $5 $4 $3 $2 $1 $ P 18P Costs and Changes, Corn, Central Illinois Change Seed Costs, Corn farmdocdaily, July 18, 217 $/acre $/acre $/acre $/acre $/acre Non-land costs Fertilizer Seed Pesticides Mach. depreciation Mach. Repair Fuel Non-land interest Seed Costs in Central Illinois and the U.S Cash rent

September 1 st, 217 Operator and Land Returns, and Cash Rents, Central Illinois,

Farm Managers and Rural Appraisers University of Illinois www.ispfmra.

Using the Productivity Index from the University of Illinois (Bulletin 811).

to 1 Fair Productivity Less than 1 Recreational Tracts Transitional Tracts Illinois

4 September 1 st, 217 Operator and Land Returns, and Cash Rents, Central Illinois, High-Productivity Farmland Midyear Survey Conducted By Illinois Society of Professional Farm Managers and Rural Appraisers University of Illinois Illinois Farmland Values & Lease Trends Understanding Our Farmland Categories Using the Productivity Index from the University of Illinois (Bulletin 811). Excellent Productivity 147 to 133 Good Productivity 132 to 117 Average Productivity 116 to 1 Fair Productivity Less than 1 Recreational Tracts Transitional Tracts Illinois Farmland Prices Land Class Midyear Price $/acre Change First Half of 217 Excellent $1,9-1.6% Good $8,9-3.% Fair $6,9-3.8% Average $5, -4.4% 4

September 1 st, 217 Farmland Market Similar volume during the first half of 217 as last half of 216 If tight inventories continue, farmland prices may stabilize

Expected Rent Excellent $35 $3 Good $26 $255 Fair $22 $21 Average $166 $16 Most farm managers expect production costs in 218 to be similar to that in 217 Most

5 September 1 st, 217 Farmland Market Similar volume during the first half of 217 as last half of 216 If tight inventories continue, farmland prices may stabilize Farmers continue to be major buyers of farmland, 131 interest increases Illinois Cash Rents on Professionally Managed Farmland Land Class 216 Average Rent 217 Expected Rent Excellent $35 $3 Good $26 $255 Fair $22 $21 Average $166 $16 Most farm managers expect production costs in 218 to be similar to that in 217 Most farm mangers seem conformable that variable cash rent leases are adjusting rents properly March release of land values booklet Registration information at 5

September 1 st, 217 Agricultural Credit Update Credit market appears to be strengthening Short-term agricultural interest rates increased slightly in 217 Further interest

Market Conditions What changes occurred in non-real-estate farm loans at your bank in the past three months relative to a year earlier?

6 September 1 st, 217 Agricultural Credit Update Credit market appears to be strengthening Short-term agricultural interest rates increased slightly in 217 Further interest rates expected as broader economy strengthens Illinois Federal Reserve Districts Quarterly surveys of agricultural bankers Credit market conditions Interest rates Credit Market Conditions What changes occurred in non-real-estate farm loans at your bank in the past three months relative to a year earlier? Demand for loans Rate of loan repayments Renewals or extensions Higher, lower, same Index: Higher Lower (i.e. net higher) Credit Conditions (Chicago)

September 1 st, 217 Credit Conditions (Chicago) 8 6 4 2-2 -4-6 -8 24 25 26 27 28 29 21 211 212 213 214 215 216 217 Credit

7 September 1 st, 217 Credit Conditions (Chicago) Credit Conditions (Chicago) Loan Demand -6 Repayment Rate -8 Renewals and Extensions Credit Conditions (St. Louis) Fixed Interest Operating Loans Loan Demand Repayment Rate Renewals and Extensions Chicago St. Louis

8 September 1 st, 217 Expect Fed to raise discount rate FOMC participants assessments of appropriate monetary policy: Midpoint of target range or target level for the federal funds rate Longer run June 217 FOMC Meeting Percent Thank You For Your Time Question? 8

COUNTY OF KANE. Eldon F. Gould Geneva, Illinois Wayne Gehrke (630)

COUNTY OF KANE. Eldon F. Gould Geneva, Illinois Wayne Gehrke (630) COUNTY OF KANE FARMLAND ASSESSMENT REVIEW COMMITTEE Mark D. Armstrong, CIAO, Chairman County Government Center Roger C. Biddle 719 Batavia Avenue, Building C Eldon F. Gould Geneva, Illinois 60134-3000