2011 Farmland Rental Rates Increase Sharply
AMES, Iowa—Current Iowa cash rent rates quickly responded to the fall 2010 increase in corn and soybean prices caused by tight grain supplies and increased demand worldwide, according to William Edwards, Iowa State University Extension economist. As those involved with the Iowa farmland rental market know, rental rates were pushed significantly higher by the favorable corn and soybean prices in 2007 and early 2008. That was followed by lower prices in late 2008 and 2009, which took much of the steam out of the land market. Cash rent for farmland in 2010 saw significant increases.
Results of the 2011 cash rental rate survey for Iowa , conducted by Edwards and his staff, estimate that the average cash rent for corn and soybean land in the state for 2011 is $214 per acre, an increase of $30 per acre or 16 percent from a year earlier. “This is the largest one-year increase since the statewide survey was started in 1994,” said Edwards. “Even more interesting was the range of typical rents reported.”
The range represents the highest and lowest estimates for typical rents in each county submitted by survey respondents, not rents for individual farms. In most counties, the lower end of the range was about the same as in 2010, but the high end of the range was as much as $50 to $100 an acre above the previous year.
Average rents were higher in all nine crop reporting districts, with increases ranging from $23 per acre (12 percent) in east central Iowa to $37 per acre (21 percent) in southwest Iowa. “Individual farm rents that were set before the Sept. 1, 2010 termination deadline probably changed very little,” Edwards said. “Rents that were negotiated later likely reflected the higher corn and soybean prices being offered then.”
The intent of the Iowa State survey is to report typical rents in force, not the highest or lowest values heard through informal sources. Rental values were estimated by asking more than 3,000 people familiar with the land market what they thought were typical rates in their county for high, medium and low quality row crop land, as well as for oats, hay and pasture acres. The number of responses received this year was 1,567, an increase of 25 percent over last year. Of these, 33 percent came from farmers, 24 percent from landowners, 22 percent from professional farm managers, 14 percent from lenders and 7 percent from other professionals.
The Cash Rental Rates for Iowa 2011 Survey is available online as a downloadable document; from the Ag Decision Maker website, www.extension.iastate.edu/agdm/wholefarm/pdf/c2-10.pdf, and from the ISU Extension online store, www.extension.iastate.edu/Publications/FM1851.pdf.