Before you talk to your landlord, consider all your options
Another production season is winding down, which means it’s time to negotiate cash rents.
“Rents negotiated this summer and fall are likely heading lower,” says Gary Schnitkey, a University of Illinois ag economist. The obvious reason: Today’s higher average cash rents are causing a cost-price squeeze in the wake of the crash in crop prices.
“Farmland rents will likely be $10 per acre lower in 2015 to start a three-year adjustment process,” he adds.
There are several online resources to help farmers and landlords reach fair rental arrangements. Get started
at Ag Lease 101, a multistate project funded by the North Central Risk Management Education Center and the USDA National Institute of Food and Agriculture. Another resource, FairRent from the University of Minnesota, helps farmers evaluate cash, share and flexible rental arrangements to set a realistic bidding range for cash rental negotiations.
Calculate rates from your mobile device with apps such as the Land Lease Calculator from the University of Nebraska–Lincoln. Or, investigate how tweaking cash rent rates could affect your bottom line with the profitability matrix from AgYield.
In light of rental negotiations, USDA recently released its annual cash rent survey results. As in previous years, cash rent values vary widely by geography. The areas commanding the highest dollar include a large portion of Iowa, Illinois and Indiana, plus patches of the Midsouth and Southeast. This year, nine counties tallied a cash rent average of $300 or more per acre of non-irrigated ground:
9. Ogle County, Ill. $300
8. Sangamon County, Ill. $302
7. Sioux County, Iowa $303
6. Piatt County, Ill. $303
5. Ida County, Iowa $307
4. Logan County, Ill. $308
3. Dakota County, Neb. $321
2. Grundy County, Iowa $322
1. Miami-Dade County, Fla. $385