Your Dad's Farm Lease Made Sense in 1987. Does It Still Make Sense Today?
Most Illinois farmland owners have never questioned the arrangement they inherited. Here's what that costs them.
The Conversation Nobody Has
There's a conversation I have regularly with farmland owners across central Illinois that goes roughly the same way every time.
How long have you had this tenant? Twenty years. Maybe thirty.
What are the terms? Same as when my dad set it up.
Have you reviewed it recently? No. It works fine.
That last answer is the one worth examining. Because “it works fine” and “it's working as well as it could” are not the same thing. And most farmland owners in Illinois have never sat down to find out the difference.
The Arrangement Nobody Questions
Farmland lease arrangements in Illinois were often set up by a previous generation under completely different market conditions. Land values were different. Commodity prices were different. Input costs were different.
The arrangement made sense then. It got passed down. Nobody questioned it because questioning it felt disloyal to the memory of the person who set it up — or because the relationship with the tenant is comfortable and nobody wants to disrupt it.
That's the scarcity mindset at work in farmland management. Not dramatic. Quiet. Someone accepts what they have because they were taught that what they have is enough and asking for more is somehow wrong.
It isn't wrong. It's your ground.
What the Market Actually Looks Like
Cash rent rates for farmland in central Illinois have moved significantly over the past decade. Land values have appreciated substantially. The productivity index of your ground may support a rental rate considerably higher than what you're currently receiving.
Most tenants are not going to volunteer this information. They're running a business. Their job is to farm your ground as profitably as possible. Your job is to make sure the arrangement reflects the current value of what you own.
If nobody has done that review recently — the gap between what you're receiving and what your ground should be generating may be significant.
The Operator Alternative
There's another version of this conversation that applies to smaller tracts — ground a landowner could realistically farm themselves with the right equipment and approach.
The economics of tenant farming on smaller tracts often look worse than most landowners realize. A 50/50 crop share means exactly that — half the crop goes to someone else.
On ground that a landowner could farm himself in a day with a drill and a tractor — the math changes. Upfront the input costs. Custom hire the harvest. Own the crop.
For a small amount of money you can own a farm that works for you instead of one that works for someone else.
That's a different way of thinking about it than most people have been shown.
The Tenant Relationship Question
Some farmland owners will read this and immediately think about their tenant — the person who has been farming their ground for twenty years, who they see at the feed store.
That relationship has value. Loyalty has value. Continuity has value.
None of that means the financial arrangement should go unexamined indefinitely.
A fair review of your lease arrangement is not a betrayal of a relationship. It's responsible ownership. The relationship and the arrangement are two separate things. One can be honored while the other is evaluated honestly.
What This Means for Illinois Farmland Owners
If you own agricultural ground in Illinois and you haven't reviewed your lease arrangement in the last two to three years — the conversation is overdue.
Not to disrupt a good relationship. Not to squeeze every dollar out of a tenant who has treated your ground well. But to make sure the arrangement reflects the current value of what you own.
That's not aggressive. That's ownership.
The ground your family built, bought, or inherited deserves to be managed with the same intention it was acquired with. Passive acceptance of whatever arrangement exists isn't stewardship. It's default.
You can do better than default.
Jared Williams is the Managing Broker of Archer Realty. He is a landowner, farmer, and land manager who farms his own ground across central Illinois and works with farmland owners on lease reviews, property evaluations, and agricultural land transactions. Start the conversation at archerrealty.net.
