Farmland rental rates increase moderately in 2013
Rental rates for Iowa farmland have been pushed signiﬁcantly higher by the favorable corn and soybean prices that farmers have enjoyed since 2010. This trend continued in 2013, but the rate of increase slowed considerably.
Results from the most recent survey of farmland rental rates carried out by Iowa State University Extension and Outreach showed that the average estimated cash rent for corn and soybean land in the state for 2013 was $270 per acre, an increase of $18 per acre or 7 percent from last year. This compares to increases of 16 percent in 2011 and 18 percent in 2012. Lower crop yields due to prolonged dry weather and lower price forecasts for the 2013 crop have tempered the optimism about prospective profits.
Average rents were moderately higher in all nine crop reporting districts, with increases ranging from 13 percent in east central Iowa to 4 percent in southwest Iowa.
Typical rental rates per bushel of corn yield, soybean yield and CSR point were computed for each county. In addition, typical charges for land growing oats and hay, for grazing pasture and corn stalks, and for renting hunting rights were reported.
The intent of the survey is to report typical rents being paid each year, not the highest nor the lowest values heard through informal sources. Rental values were estimated by asking people familiar with land rental markets what they thought were typical rates in their county. The number of responses received this year was 1,703, a 20 percent increase from last year. Of the total responses, 50 percent came from farmers, 27 percent from landowners, 13 percent from professional farm managers, 8 percent from agricultural lenders, and 2 percent from other professionals.
The Cash Rental Rates for Iowa 2013 Survey is available online as a downloadable document from the Ag Decision Maker website.
Other resources available for estimating a fair cash rental rate include these Ag Decision Maker information ﬁles: Computing a Cropland Cash Rental Rate (C2-20), Computing a Pasture Rental Rate (C2-23) and Flexible Farm Lease Agreements (C2-21). All documents include decision file electronic worksheets to help analyze leasing questions.
Leasing workshops provide resources on farmland surveys and leasing arrangements
Farmland leasing workshops for both tenants and land owners are being held again this year during July and August. These workshops are designed to assist landowners, tenants and other agri-business professionals with current issues related to farmland ownership, management and leasing agreements. In previous years, over 50 meetings were held across the state. This year meetings will again take place in various counties, and there is sure to be one at a time and place that will work for you.
Meetings are approximately three hours in length and are facilitated by ISU Extension farm management specialists. Each workshop attendee will receive a set of beneficial materials regarding farm leasing arrangements and farmland ownership.
Topics covered include:
- Iowa Cash Rental Rate Survey and Land Values Survey
- Comparison of different types of leases
- Lease termination
- Impacts of yields and prices
- Calculating a fair cash rent
- Use of spreadsheets to compare leases
- Issues unique to this year’s production and an outlook for 2014
- Available Internet resources
The ISU Extension calendar lists available meeting dates, locations and links to more information. Locations will be added as they become available, or contact your county extension ofﬁce to ﬁnd the nearest meeting location. The leasing section of Ag Decision Maker also provides useful materials for negotiating leases, information on various types of leases, lease forms and newly updated decision tools.
Knowing the latest information and where to find the best resources will make decisions easier for you and your clientele. Look to ISU Extension and Ag Decision Maker for information and decision tools this summer.
, retired economist.