ISU Extension News

Extension Communications
3614 Administrative Services Building
Ames, Iowa 50011-3614
(515) 294-9915

6/17/03

FOR IMMEDIATE RELEASE

Contacts:
William Edwards, Ag Economics, (515) 294-6161, wedwards@iastate.edu
Jean McGuire, Continuing Education and Communication Services, (515) 294-7033, jmcguire@iastate.edu

Modest Gains for Cash Rental Rates of Iowa Farm Land

Ames, Iowa -- Average cash rental rates in Iowa increased modestly over the last year, according to results from an annual survey by Iowa State University (ISU) Extension. Forty percent of Iowa's cropland is rented under cash rent lease agreements. Profits and losses are highly variable from year to year, and expectations of future returns ultimately are bid back into land rents as well as land selling prices.

A year ago both landowners and tenants were anticipating a surge in cash rents resulting from larger government payments under the 2003 farm bill, said William Edwards, co-author of the survey and professor, Iowa State University. "In the end, however, yields and prices have probably had more impact on rental rates for this year than the new USDA program."

Survey Results
The ISU survey of showed increases in typical cash rents for all regions of the state. The largest increases were in east central and southeast areas of the states. The estimated average rental rate for the entire state was $128 per acre, compared to $124 last year. Most, though not all, counties showed modest increases in typical rents, especially for lower quality land.

"It is difficult to tell how much impact the new farm bill had on cash rents for 2003," said Edwards. "Expectations of higher USDA payment levels have largely evaporated, as grain prices have remained above loan rates most of the year. Not only will farmers not collect loan deficiency payments, it looks unlikely that any counter cyclical payments will be made for the 2002 crop, either. That leaves only the direct payments to supplement income from the marketplace."

"On the positive side, however, new records were set for state average yields in 2002," and many farms harvested their best crops ever," said Edwards. "While prices are not at high levels, they have increased enough to more than offset the loss of loan deficiency payments in most counties. Moreover, strong competition for rented land has kept rates at historically high levels in many communities."

Rents Vary by Productivity
Average rents per bushel of expected corn yield were calculated using county average yields since 1993. These rates ranged from about $.87 per bushel in south central Iowa to over $1.00 per bushel in east central Iowa. Stronger grain prices near the Mississippi River and the large number of acres devoted to seed production tended to support rental rates in some areas.

The full summary of the survey is contained in ISU Extension publication FM-1851, "Cash Rental Rates for Iowa," which is available through ISU Extension county offices, from the ISU Extension Distribution Center at (515) 294-5247, or on the Web at https://www.extension.iastate.edu/Publications/FM1851.pdf.

-30-

ml: isufarm

Editors: A black and white map, suitable for publication, is available at right in JPG and PDF formats. Click on the thumbnail photo to go to the fullsized photo. The JPG photo is 440K, and the PDF is 16K.

Caption: Cash Rent 2000 (JPG format)

Caption: Cash Rent 2000 (PDF format)

Extension programs are available to all without regard to race, color, national origin, religion, sex, age, or disability.

News Menu | ISU Extension