Social and Behavioral Sciences Commons^™

Spatial Analysis Of Illinois Agricultural Cash Rents, Shannon Woodard, Nicholas Paulson, Kathy Baylis, Joshua Woodard

Kathy Baylis

During the summer of 2008, corn futures prices rose 119.8% compared to the previous year. The resulting nominal prices were the highest in history. Anecdotal evidence implied that much of these benefits accrued to land owners through increased land values and cash rent levels. In this article, we use unique farm-level data and novel spatial econometric tools to determine how farmland rents are affected by changes in commodity prices and government payment levels. Contrary to predictions from the Ricardian rent model, we find that tenant farmers are able to capture the vast majority of price increases and a large fraction …