Farmland Leasing Arrangements
Ron Hook, Field Specialist-Farm Management, Northwest Area
Problem Statement:
The increase in grain prices resulting from increased grain usage in the bio-economy caused many tenants and landlords to question the terms of leasing arrangements for 2008. Current information about alternative leases to cash rent leases was needed by both tenants and landlords as they determined terms for leases in 2008.
Programmatic Response:
Farmland Leasing Arrangements workshops were conducted by me in my area during the summer of 2007. These workshop provided current information on land values, cash rental rates, alternative leasing arrangements, input costs for corn and soybean production and other factors that should be considered in farmland leasing arrangements. Twelve workshops were held in northwest Iowa with 462 participants.
Impact/Outcome:
A survey of 100 participants conducted at the end of the workshops was completed by 50 individuals.
- The overall quality of this educational program was rated 4.25 out of a possible 5.
- The quality of presentation was rated 4.46 out of a possible 5.
- The Breeze presentation was rated 4.16 out of a possible 5.
- The Farmland Leasing 2006 booklet was rated 4.38 out of a possible 5.
- Program registration, cost, location, facilities and refreshments were rated 4.08 out of a possible 5.
- 45% indicated that they had learned about the program from newspaper advertising and 33% learned about it from radio advertising.
- Participants indicated that they currently own, operate, or manage 29,347 acres of farmland an average of 586 acres per landowner.
- Participants indicated the possibility of making the following changes in their farmland leasing arrangement on a 1 to 5 scale with 1 being Likely and 5 being Unlikely.
Switch from cash rent to a crop share lease arrangement rated 4.51
Switch from a crop share lease to a cash rent lease arrangement rated 3.67
Put in place a flexible cash rent lease arrangement rated 4.16
Rent to a beginning farmer and apply for the Beginning Farmer Tax Credit rated 4.33
Sell farmland in the light of current high prices rated 4.81
- Participants were asked about their knowledge of various aspects of leasing covered in the workshop before and after the program:
Trends in farmland values increased from 3.70 to 4.17 on a 1 to 5 scale
Farmland leasing trends increased from 3.06 to 4.17 on a 1 to 5 scale
The seven methods of calculating fair cash rent value increased from 2.15 to 4.04 on a 1 to 5 scale
The basics of a flexible cash lease increased from 2.0 to 3.66 on a 1 to 5 scale
The Beginning Farmer Tax Credit increased from 2.02 to 3.55 on a 1 to 5 scale
Legal issues related to renting farmland increased from 2.83 to 3.96 on a 1 to 5 scale
Resources available from ISU Extension for farmland leasing information increased from 2.72 to 4.09 on a 1 to 5 scale
2008
120 Farm and Business Management
Page last updated: April 11, 2008
Page maintained by Linda Schultz, lschultz@iastate.edu
