Caution advised on high land rental rates
Many crop producers in the Upper Midwest, but not all producers, are coming off one of their best crop production years ever in 2016, as far as corn and soybean yields are concerned. In addition, many farm operators in the same region that are enrolled in the Ag Risk Coverage (ARC-CO) farm program option recently received an ARC-CO payment on their 2015 corn crop; however, the payments were highly variable, and some producers did not receive any ARC-CO 2015 payment. These two factors are leading some farm operators to be overly optimistic about crop income expectations for 2017, and resulting in some landlords being unwilling to reduce high cash rental rates for the 2017 crop year.