Farm Journal Pulse survey finds Midwest cash rents have increased about 40% since 2011
With the recent explosion in farmland prices, it probably comes as no surprise that farmers are reporting increased cash rents in some areas as well.
But just how much are farmers paying this year?
According to the most recent Farm Journal Pulse
, a text message survey of farmers and ranchers, the national average cash rent price is $192. Nearly 1,200 farmers and ranchers across the country reported the highest cash rent they pay; results were then averaged by state.
The states with the highest average cash rent per acre are: Idaho at $428; Washington at $346; Iowa at $289; Illinois at $256; and Minnesota at $233.
Mike Walsten, editor of LandOwner, said these prices, when compared to USDA’s August 2011 cash rent numbers, seem to reflect the recent rise in farmland prices of about 30%.
On track. For example, USDA’s 2011 average cash rent price for Illinois was $183 per acre. The average price reported to Farm Journal Pulse was $256, about a 40% increase. Similar increases were seen in Indiana and Iowa cash rents.
The Federal Reserve Bank of Chicago reported last month that farmland values are expected to rise at slightly lower rates: 28% in Iowa, 27% in Indiana, and 21% in Illinois.
"It (Farm Journal Pulse) dramatizes the sharp increase we’ve seen in cash rent prices as cash rents adjust to reflect rising land prices," Walsten said.
Walsten said the Iowa and Illinois cash rents reported to the Pulse are notable, because until recently, Illinois prices would have been higher.
"Until recent years, Indiana and Illinois would have been higher, reflecting their strong export markets with access to rivers and waterways," he said.
But thanks to Iowa’s strong livestock and ethanol industries, that’s no longer the case.
"Iowa has seen a stronger uptick in land prices than Illinois," Walsten said, noting that a cash rent auction in Iowa last year saw prices of up to $530 per acre.
However, not all regions have seen the land boom that the Corn Belt has. According to the Farm Journal Pulse, the states with lowest average cash rents are: South Carolina at $43 per acre; Oklahoma at $48; Montana at $55; Alabama at $64; and Texas at $73.