Cash Rent Trends Stagnant

December 5, 2015 02:13 AM

Farmer polls from 2014 and 2015 yield similar results

With farm budgets tightening once again for 2016, cash rent is one of several possible places to cut. But are farmers walking away from these negotiations with a better deal?

Maybe not, according to the latest Farm Journal Pulse poll. When 1,467 farmers were asked about whether their cash rents would go up, down or stay the same in 2016, only 16% say they’re anticipating a drop. A small amount (6%) say they’re expecting higher cash rents in 2016, with the majority (67%) of cash rents remaining unchanged. Another 12% responded they do not rent ground.

These poll results mirror a 2014 Pulse poll that asked the same question. In 2014, 17% of respondents expected lower cash rents, 8% higher and 63% about the same, with 12% reporting they do not rent ground.

Steve Bruere, president of People’s Company, a land brokerage and appraisal firm, says he sees cash rents softening in his home state of Iowa.

“It’s definitely moving in the right direction,” he says. 

At the same time, it’s hard to walk away from ground that’s perceived as too expensive, Bruere says. It’s difficult to adjust fixed costs—plus, the move is often permanent, he says. 

Even if landlords are reluctant to reduce cash rents, farmers need to start the conversation, says Michael Langemeier, Purdue University ag economist. 

“Net returns are likely to remain below breakeven for three years,” he says. “With some landlords, it may be possible to discuss share-rent or flex-rent arrangements. These arrangements would provide benefits to landlords if gross revenues spike.”

The majority of respondents say their cash rent rates will not change next year. Of the 1,467 respondents, 12% say they do not rent any farmland.


Cash rent values are much slower to move upward or downward, as highlighted by this comparison of 2014 and 2015 Farm Journal Pulse polls.


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Spell Check

Michael E.
Dallas City, IL
2/5/2016 02:54 PM

  If a Landowner has a Farmer who is doing a above average job taking care of the land the Landowner needs to work with them and compromise on the rent. Greed should not be part of the equation.


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