To Pay or Walk Away?

November 5, 2016 02:24 AM
 
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Survey shows more farmers willing to give up land if cash rents don’t come down for the 2017 season

Farming the fertile Indiana ground is Jason Wykoff’s passion and livelihood. But in 2015, when the landlord of 1,200 acres he farmed changed key terms of his lease, Wykoff says he was forced to make one of the most difficult decisions of his career.

“We’d been previously farming on shares,” says Wykoff, whose operation is based near New Carlisle in northwest Indiana. “When the lease was up, the owner wanted to go to a cash rent agreement. We felt it was just in an area where we couldn’t survive long-term,” he says.

So, Wykoff decided to walk away. He had invested a lot in the acres he had farmed for eight years, including tile and irrigation. 

Even so, nearly a year later, Wykoff says he doesn’t regret his decision. 

“If we were still farming that farm in the current situation, I would have a lot of anxiety,” he says.

Wykoff isn’t alone. In Pro Farmer’s annual LandOwner survey, other farmers say if prices don’t come down next year, they might walk away, too.

In the survey of Pro Farmer member-farmers, 44% said they’re willing to walk away from a cash lease if it isn’t lowered going into 2017, says Mike Walsten, editor of LandOwner newsletter, which is part of Farm 
Journal Media. That percentage is up from 40% in 2015’s survey.

Others are more cautious. This year, 47% of respondents said they’ll “probably not” walk away from a lease if cash rent isn’t lowered; 9% said they “absolutely will not” walk away under the same circumstances.

The LandOwner survey data also points to a decline in 2017 cash rental rates of about 7.5% on average.

In 2016, several university and USDA surveys found cash rents went down by 5% to 7.5% on average across the Midwest. 

For an annual subscription to the LandOwner newsletter, published twice a month, for $259 or to buy the Oct. 20 issue that includes the 2016 Land Survey results for $9.95, visit www.ShopFarmJournal.com/landowner.

 

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