AMES, Iowa – Rental rates for Iowa farmland increased for the first time since 2013, according to the results of the Cash Rental Rates for Iowa 2018 Survey conducted by Iowa State University Extension and Outreach.
“Cash rents seem to be following land values instead of expected farm profitability,” said Alejandro Plastina, assistant professor in economics and extension economist at Iowa State University. “If current prospects for corn and soybean prices don’t improve in the short run, the observed increase in cash rents for 2018 might be short-lived and I would expect further declines in rental rates in the coming years.”
In 2018, rental rates increased by 1.4 percent to $222 per acre statewide, with increases in prices shown in all regions but the south-central and southeast regions. The largest increase in prices came from District 5, a $9 jump in the counties making up the central region of the state. The largest decline in prices came from District 9, a $6 drop in the counties making up the south-central region of the state.
The highest average cash rent was observed in the District 5 (central region) at $290 per acre in Grundy County.
District 8, the south-central region, continues to have the lowest rental rate at $126 per acre in Clarke County.
The cumulative drop in rental rates since their peak of $270 per acre in 2013 is a meager 17.8 percent. Over the same period of time, corn and soybean prices received by Iowa farmers declined by 52 and 37 percent, respectively.
Rental values were estimated by asking people familiar with land rental markets what they thought were typical rates in their county. Of the 1,596 responses received, 47 percent came from farm operators, 29 percent from landowners, 13 percent from professional farm managers and realtors, 9 percent from agricultural lenders and 2 percent from other professionals.
Other resources available for estimating a fair cash rental rate include the 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.