Although many producers aren’t afraid to walk away from high cash rents next year, most say they’ll tough out high rates yet again. That’s according to a new survey of Pro Farmer members and LandOwner newsletter subscribers published Thursday, Oct. 8.
Fully 40% say they “probably” or “absolutely” will walk away from cash leases for which rates aren’t lowered in 2016. Yet 60% say they probably or absolutely will not abandon those leases.
“That emphasizes how important it is to the long-term financial success of the farming operation that producers are willing to likely lose money in the short-term rather than abandon the ground to cut losses,” explains Mike Walsten, editor of LandOwner. “It reflects the reality that once control is lost, the chances of getting the ground back when the profit outlook is better is closer to 0% than it is to 50%. Way closer.”
(Get more survey results and the latest trends in land values with Pro Farmer’s Annual Land Report. Click here to visit profarmer.com/land-report-request/.)
One mitigating factor might be that more than 70% anticipate lower cash rent rates ahead.
“We are fortunate to have understanding landlord and have a flex lease,” wrote an Iowa member who responded to the survey. “We try to be fair with each other. They believe caring for the land properly is more important than the high unfair rental rates some are getting. We care. They care. We are blessed.”
Other findings from the report, as shared by members in the survey:
- Cash rents will decline 10% or less
- The same will be true for land values with a decline or 10% or less
- 41% plan to buy land in the next year
- Just 7% plan to sell farmland in the next year
- Iowa members represented the highest percentage of respondents (22%) followed by Minnesota (13%), Illinois (11%), Nebraska (9%) and Ohio (8%)
For complete survey results and the latest trends in land values with Pro Farmer’s Annual Land Report, visit profarmer.com/land-report-request/.