AMES, Iowa – Despite another difficult year in agriculture, cash rents still posted an increase of about 1.4%, according to this year’s
Cash Rental Rates for Iowa 2020 Survey, released earlier this month. Rates across the state averaged $222 per acre, compared to $219 per acre in 2019, the fourth year of relatively stable rates, but at levels about 18% lower than the historical peak reached in 2013, of $270 per acre. “It’s surprising for me to see that cash rents are pretty stable and have not gone down,” said Alejandro Plastina, associate professor and extension economist at Iowa State University. “And that’s likely a reflection that government programs last year were injecting enough liquidity.”
The survey included nearly 1,600 responses from farmers, landowners, professional farm managers, realtors and others with knowledge of land rents, reportedly familiar with 1.6 million acres of cash-rented land across Iowa. The percentage of increase varied across the state, with the lowest quality land showing the largest increase, at 2.7% per acre, compared to the .4% increase for high quality land. According to Plastina, most cash rents for 2020 were determined by September 2019, during expectations of federal Market Facilitation Program payments and expectations of higher soybean exports to China. He said the challenges of 2020 were mostly not yet considered, and could lead to some future renegotiations and softening of rates. Those challenges include economic losses from the coronavirus, delays in the Phase 1 trade deal, and decreased demand for biofuels, due to plummeting oil prices.
