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Revisiting the Merits of Variable Cash Leases for 2025

Author

Listed:
  • Paulson, Nick
  • Schnitkey, Gary
  • Zulauf, Carl

Abstract

Recent articles have outlined the negative returns facing producers with lower corn and soybean prices and production costs which have only partially adjusted down from highs in 2023. The variable cash lease design has been gaining traction in recent years as a way for farmer tenants to achieve some risk-sharing while also avoiding some of the inconveniences associated with asking landlords to be involved with managerial decisions as is required by a traditional share lease. Today’s article highlights how revenue-based variable leases can still result in large negative farmer returns in the current economic environment where cost adjustments are lagged and smaller in size than the revenue reductions facing producers.

Suggested Citation

  • Paulson, Nick & Schnitkey, Gary & Zulauf, Carl, 2025. "Revisiting the Merits of Variable Cash Leases for 2025," farmdoc daily, University of Illinois at Urbana-Champaign, Department of Agricultural and Consumer Economics, vol. 14(188).
    • Handle: RePEc:ags:illufd:358418
    DOI: 10.22004/ag.econ.358418
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